Gilbane Building Company today announces the publication of the Spring 2013 edition of Construction Economics – Market Conditions in Construction. Based on an array of economic data, construction starts, and material cost trends, the data is the most positive the company has seen in recent years.
“We are in a growth period that by all leading indicators seems here to stay. From 2006 to 2010, as work declined, we saw the largest decline of margins in recent history. In 2011 that trend began to reverse slightly” says Ed Zarenski, the report’s author and a 40-year veteran of the construction industry. “I expect the positive growth to continue.”
According to the report, the monthly rate of construction spending is up 20% in 24 months and increased in 18 of the last 24 months, which is a good leading indicator for new construction work in Q3-Q4 2013.
Other highlights include:
- Residential spending will take the lead in 2013, nonresidential spending will lag.
- Public spending will decline. Private spending will lead the charge in 2013.
- As spending continues to increase, even moderate growth in activity will allow contractors to pass along more material costs and increase margins. When activity picks up in all sectors, escalation will begin to advance rapidly.
- Predicted spending growth of 8.2% for Commercial markets, 5.2% for Office and 2.3% for Healthcare.
Construction jobs grew by 150,000 in the last five months. Just to meet the needs of the predicted residential building expansion, the workforce needs to grow by 750,000 jobs in the next two years, faster than the entire construction workforce has ever grown in history.
Future escalation, in order to support labor growth, materials demand and to capture increasing margins, will be higher than normal labor/material cost growth. Lagging regions may take longer to experience high escalation. Residential escalation will be near the upper end of the range.
This free report and its executive summary are available for download at http://www.gilbaneco.com/economic-report.
About Gilbane, Inc.
Gilbane provides a full slate of construction and facilities-related services – from pre-construction planning and integrated consulting capabilities to comprehensive construction management, close-out and facility management services – for clients across various markets. Marking its 140th year in operation and still a privately held, family-run company, Gilbane has more than 60 office locations around the world. To find out what the next 140 years have in store, visit www.gilbaneco.com.
Related Stories
| May 3, 2012
Ground broken for $94 million hospital expansion at Scripps Encinitas
New facility to more than double emergency department size, boost inpatient beds by 43%.
| May 3, 2012
Rudolph and Sletten, Inc. wins CMAA award
Firm recognized for the renovation of Grossmont-Cuyamaca Community College’s Student Administrative & Griffin Student Center.
| May 2, 2012
Trimble acquires SketchUp 3D modeling platform
The transaction is expected to close in the second quarter of 2012.
| May 2, 2012
Building Team completes two additions at UCLA
New student housing buildings are part of UCLA’s Northwest Campus Student Housing In-Fill Project.
| May 2, 2012
Public housing can incorporate sustainable design
Sustainable design achievable without having to add significant cost; owner and residents reap benefits
| May 2, 2012
SMPS Foundation accepting applications for Garikes Scholarship
One outstanding scholar will be selected this year to receive a $1,500 scholarship award, to be used toward academic expenses, such as tuition and fees, books, supplies, and other similar expenses.
| May 2, 2012
Sasaki selected for 2012 National Planning Firm Award
The award recognizes a firm for its body of distinguished work influencing the planning profession.
| May 1, 2012
White paper discusses benefits of diaphragm and piston flushometer valves
The white paper highlights considerations that impact which type of technology is most appropriate for various restroom environments.
| May 1, 2012
Time-lapse video: World Trade Center, New York
One World Trade Center, being built at the site of the fallen twin towers, surpassed the Empire State Building on Monday as the tallest building in New York.