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
| Aug 11, 2010
AGC unveils comprehensive plan to revive the construction industry
The Associated General Contractors of America unveiled a new plan today designed to revive the nation’s construction industry. The plan, “Build Now for the Future: A Blueprint for Economic Growth,” is designed to reverse predictions that construction activity will continue to shrink through 2010, crippling broader economic growth.
| Aug 11, 2010
New AIA report on embassies: integrate security and design excellence
The American Institute of Architects (AIA) released a new report to help the State Department design and build 21st Century embassies.
| Aug 11, 2010
Section Eight Design wins 2009 Open Architecture Challenge for classroom design
Victor, Idaho-based Section Eight Design beat out seven other finalists to win the 2009 Open Architecture Challenge: Classroom, spearheaded by the Open Architecture Network. Section Eight partnered with Teton Valley Community School (TVCS) in Victor to design the classroom of the future. Currently based out of a remodeled house, students at Teton Valley Community School are now one step closer to getting a real classroom.
| Aug 11, 2010
High-profit design firms invest in in-house training
Forty-three percent of high-profit architecture, engineering, and environmental consulting firms have in-house training staff, according to a study by ZweigWhite. The 2008-2009 Successful Firm Survey reports that only 36% of firms overall have in-house training staff. In addition, 52% of high-profit firms use an online training system or service.
| Aug 11, 2010
Help Wanted: Architect for $100 million 'Discovery Park' in Union City, Tennessee
The Robert E. and Jenny D. Kirkland Foundation is identifying architects interested in designing a 50-acre, multi-million dollar complex in Union City, TN. Discovery Park of America will be a world-class, multi-faceted venue presenting exhibits and interactive experiences about history, nature, art, and science.