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 25, 2011
Register today for BD+C’s June 8th webinar on restoration and reconstruction projects
Based on new and award-winning building projects, this webinar presents our “expert faculty” to examine the key issues affecting project owners, designers and contractors in case studies ranging from gut renovations and adaptive reuses to restorations and retrofits.
| May 25, 2011
Hotel offers water beds on a grand scale
A semi-submerged resort hotel is the newest project from Giancarlo Zema, a Rome-based architect known for his organic maritime designs. The hotel spans one kilometer and has both land and sea portions.
| May 25, 2011
Smithsonian building $45 million green lab
Thanks to a $45 million federal appropriation to the Smithsonian Institution, the Smithsonian Environmental Research Center in Edgewater, Md., has broken ground on what is expected to be one of the most energy-efficient laboratories in the country. The 69,000-sf lab is targeting LEED Gold and is expected to use 37% less energy and emit 37% less carbon dioxide than a similar building.
| May 25, 2011
World’s tallest building now available in smaller size
Emaar Properties teamed up with LEGO to create a miniature version of the Burj Khalifa as part of the LEGO Architecture series. Currently, the LEGO Burj Khalifa is available only in Dubai, but come June 1, 2011, it will be available worldwide.
| May 25, 2011
Developers push Manhattan office construction
Manhattan developers are planning the city's biggest decade of office construction since the 1980s, betting on rising demand for modern space even with tenants unsigned and the availability of financing more limited. More than 25 million sf of projects are under construction or may be built in the next nine years.
| May 25, 2011
Olympic site spurs green building movement in UK
London's environmentally friendly 2012 Olympic venues are fuelling a green building movement in Britain.
| May 25, 2011
TOTO tests universal design at the AIA conference
If you could be 80 years old for 30 minutes—and have to readjust everything you think you know about your own mobility—would you do it?
| May 20, 2011
Hotels taking bath out of the bathroom
Bathtubs are disappearing from many hotels across the country as chains use the freed-up space to install ever more luxurious showers, according to a recent USAToday report. Of course, we reported on this move--and 6 other hospitality trends--back in 2006 in our special report "The Inn Things: Seven Radical New Trends in Hotel Design."
| May 19, 2011
BD+C’s "40 Under 40" winners for 2011
The 40 individuals profiled here are some of the brightest stars in the AEC universe—and they’re under the age of 40. These young architects, engineers, contractors, designers, and developers stood out among a group of 164 outstanding entrants in our sixth annual “40 Under 40” competition.
