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
| Jan 6, 2012
Summit Design+Build completes Park Place in Illinois
Summit was responsible for the complete gut and renovation of the former auto repair shop which required the partial demolition of the existing building, while maintaining the integrity of the original 100 year-old structure, and significant re-grading and landscaping of the site.
| Jan 4, 2012
Siemens acquires Pace Global Energy Services
Acquisition will enhance portfolio with new energy consulting and management services.
| Jan 4, 2012
Shawmut Design & Construction awarded dorm renovations at Brown University
Construction is scheduled to begin in June 2012, and will be completed by December 2012.
| Jan 4, 2012
Skanska acquires Industrial Contractors
Industrial Contractors Inc. is a contractor in the commercial, industrial and power markets of the Midwest. The company employs 2,400 people and in 2011 the revenues are estimated to be approximately $500 million.
| Jan 4, 2012
HDR to design North America’s first fully digital hospital
Humber River is the first hospital in North America to fully integrate and automate all of its processes; everything is done digitally.
| Jan 4, 2012
New LEED Silver complex provides space for education and research
The academic-style facility supports education/training and research functions, and contains classrooms, auditoriums, laboratories, administrative offices and library facilities, as well as spaces for operating highly sophisticated training equipment.
| Jan 3, 2012
Gilbane awarded $88M Contract for Ohio elementary school construction
The new award, which comprises the construction of five new elementary schools and demolition of 11 older facilities, is the latest K-12 building program managed by Gilbane for the Ohio School Facilities Commission since 1998.
| Jan 3, 2012
AIA's ABI November Index reaches 52.0
The Architecture Billings Index (ABI) reached its first positive mark since August.
| Jan 3, 2012
Callison acquires Barteluce Architects & Associates
This acquisition will grow Callison’s New York team to over 75 architects.
| Jan 3, 2012
VDK Architects merges with Harley Ellis Devereaux
Harley Ellis Devereaux will relocate the employees in its current Berkeley, Calif., office to the new Oakland office location effective January 3, 2012.