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
| Nov 29, 2010
Data Centers: Keeping Energy, Security in Check
Power consumption for data centers doubled from 2000 and 2006, and it is anticipated to double again by 2011, making these mission-critical facilities the nation’s largest commercial user of electric power. Major technology companies, notably Hewlett-Packard, Cisco Systems, and International Business Machines, are investing heavily in new data centers. HP, which acquired technology services provider EDS in 2008, announced in June that it would be closing many of its older data centers and would be building new, more highly optimized centers around the world.
| Nov 29, 2010
New Design Concepts for Elementary and Secondary Schools
Hard hit by the economy, new construction in the K-12 sector has slowed considerably over the past year. Yet innovation has continued, along with renovations and expansions. Today, Building Teams are showing a keener focus on sustainable design, as well as ways to improve indoor environmental quality (IEQ), daylighting, and low-maintenance finishes such as flooring.
| Nov 29, 2010
Renovating for Sustainability
Motivated by the prospect of increased property values, reduced utility bills, and an interest in jumping on the sustainability bandwagon, a noted upturn in green building upgrades is helping designers and real estate developers stay busy while waiting for the economy to recover. In fact, many of the larger property management outfits have set up teams to undertake projects seeking LEED for Existing Buildings: Operations & Maintenance (LEED-EBOM, also referred to as LEED-EB), a certification by the U.S. Green Building Council.
| Nov 23, 2010
The George W. Bush Presidential Center, which will house the former president’s library
The George W. Bush Presidential Center, which will house the former president’s library and museum, plus the Bush Institute, is aiming for LEED Platinum. The 226,565-sf center, located at Southern Methodist University, in Dallas, was designed by architect Robert A.M. Stern and landscape architect Michael Van Valkenburgh.
| Nov 23, 2010
Honeywell's School Energy and Environment Survey: 68% of districts delayed or eliminated improvements because of economy
Results of Honeywell's second annual “School Energy and Environment Survey” reveal that almost 90% of school leaders see a direct link between the quality and performance of school facilities, and student achievement. However, districts face several obstacles when it comes to keeping their buildings up to date and well maintained. For example, 68% of school districts have either delayed or eliminated building improvements in response to the economic downturn.
| Nov 16, 2010
Architecture Billings Index: inquiries for new projects remain extremely high
The new projects inquiry index was 61.7, down slightly from a nearly three-year high mark of 62.3 in September, according to the Architecture Billings Index (ABI). However, the ABI dropped nearly two points in October; the October ABI score was 48.7, down from a reading of 50.4 the previous month. The ABI reflects the approximate nine to 12 month lag time between architecture billings and construction spending.
| Nov 16, 2010
Brazil Olympics spurring green construction
Brazil's green building industry will expand in the coming years, spurred by construction of low-impact venues being built for the 2016 Olympics. The International Olympic Committee requires arenas built for the 2016 games in Rio de Janeiro meet international standards for low-carbon emissions and energy efficiency. This has boosted local interest in developing real estate with lower environmental impact than existing buildings. The timing couldn’t be better: the Brazilian government is just beginning its long-term infrastructure expansion program.
| Nov 16, 2010
Green building market grows 50% in two years; Green Outlook 2011 report
The U.S. green building market is up 50% from 2008 to 2010—from $42 billion to $55 billion-$71 billion, according to McGraw-Hill Construction's Green Outlook 2011: Green Trends Driving Growth report. Today, a third of all new nonresidential construction is green; in five years, nonresidential green building activity is expected to triple, representing $120 billion to $145 billion in new construction.
| Nov 16, 2010
Calculating office building performance? Yep, there’s an app for that
123 Zero build is a free tool for calculating the performance of a market-ready carbon-neutral office building design. The app estimates the discounted payback for constructing a zero emissions office building in any U.S. location, including the investment needed for photovoltaics to offset annual carbon emissions, payback calculations, estimated first costs for a highly energy efficient building, photovoltaic costs, discount rates, and user-specified fuel escalation rates.
