FMI released the first-quarter 2012 Construction Outlook Report forecasting a 5% increase in total construction put in place for 2012 compared to 2011, or $826.3 billion. The last time construction put in place was at this level was 2000-2001.
Despite slow growth projections and rising gasoline prices, the GDP is still growing and consumers are still spending, reflected in the Conference Board's Consumer Confidence Index increasing to 70.8 in February compared to 70.4 a year ago. Along with the Federal Reserve's intervention, these factors have served to keep growth slow and inflation in check.
In order for residential construction to achieve the 8 percent increase projected and top $264.4 billion in 2012, a number of factors still have to fall into place:
- Reduction in the current inventory of homes
- Lenders willing to lend on reasonable terms
- Steady improvement in hiring
Projections indicate a 4% increase in nonresidential buildings for 2012, topping $341 billion, with slightly higher growth in 2013 to $361 billion. Nonresidential contractors are facing many of the same problems as residential contractors. In addition, competition is fierce, with low price still the name of the game. Project owners who are ready to restart their building programs are expecting hungry contractors to submit very low bids. One of the keys for growth will be the return of private investment in construction. Additionally, federal, state and local government construction have been dialed back until budgets are in better repair and tax revenues return to levels that are more normal. Research indicates that there are signs this is starting to happen. BD+C
Related Stories
| Aug 22, 2014
Spireworks app lets users control a piece of the New York skyline
Mark Domino, the son-in-law of developer Douglas Durst, has developed an app, called Spireworks, that allows anyone with a smartphone to change the color of a building's lights.
| Aug 21, 2014
Ranked: Top science and technology sector AEC firms [2014 Giants 300 Report]
HDR, Affiliated Engineers, and Skanska top BD+C's rankings of the nation's largest S+T sector design and construction firms.
| Aug 21, 2014
Ranked: Top convention center AEC firms [2014 Giants 300 Report]
Gensler, AECOM, and Hunt Construction top BD+C's rankings of the nation's largest convention center design and construction firms.
| Aug 21, 2014
Apartment construction hits 25-year high
The boost to apartment construction suggests that job gains are encouraging the creation of households.
| Aug 21, 2014
Strategies for providing great customer service
Customers are inherently inefficient and inconvenient to do business with, writes Customer Service Consultant Micah Solomon, in a recent Forbes post. That’s why he believes great customer service depends on understanding this. SPONSORED CONTENT
Sponsored | | Aug 21, 2014
Defining the measure of success when implementing new technologies
Sasha Reed and Chad Dorgan, McCarthy Building Cos.’s Vice President of Quality and Sustainability, discuss the keys to managing innovation within a large construction firm. SPONSORED CONTENT
| Aug 21, 2014
RTKL's parent company Arcadis acquires Callison
The acquisition of Callison, known predominantly for its leadership in retail and mixed-use design, builds on Arcadis’ strong global design and architecture position, currently provided by RTKL.
| Aug 21, 2014
Must See: Detroit's Beaux-Arts parking garage
An opulent Renaissance Revival building in downtown Detroit is being used as a parking garage.
| Aug 20, 2014
WELL Building: The next step in green sports construction
The WELL Building Standard, a new protocol that focuses on human wellness within the built environment, is a particularly good fit for sports facilities, write Skanska's Tom Tingle and Beth Heider.
| Aug 20, 2014
Seattle's King Street Station thoughtfully restored [2014 Reconstruction Awards]
After years of neglect and botched renovations, King Street Station sparkles once again.