FMI, the largest provider of management consulting and investment banking to the engineering and construction industry, announces the release of the Construction Outlook: Third Quarter 2011 Report.
Overall, in FMI’s latest forecast for construction put in place calls for 2% growth in 2011 and 6% for 2012 to $886.2 billion in total construction. In today’s economy that sounds like ambitious growth, but in constant 2006 dollars, that is only 3% growth for 2012 and a 1% drop in construction for 2011. To put it in perspective, in 2012 we will nearly return to 2003 levels of construction in current dollars.
Despite geo-political upheavals and constant debates about debt levels in the U.S. and Europe, budget brinksmanship in Congress, as well as a rash of natural disasters, construction markets are inching along. U.S. GDP is slow at 1.3%, but positive. Some of the unemployment problem is due to increased productivity in manufacturing and other service businesses, but, so far, there doesn’t seem to be much innovation and investment in new markets and jobs. Both consumers and businesses are rebuilding their savings and confidence in the economy, but that is a slow process with numerous setbacks. It seems that the largest barrier to moving the economy forward is fear that no one has a plan that will work. After the go-go years of high finance and exuberant housing markets, we now have high-risk aversion, and not without good reasons.
In the midst of these extremes, the inchworm economy is struggling along, and it will take some time to revive an industry the size of U.S. construction. There are positive signs to build on, for instance, if businesses with record profits now held in reserve decide that they can make more with their money by investing in new R&D, plants, equipment and personnel, then a new construction boom could follow. On the other hand, as economists like to say, if fear and risk aversion win out, those looking for a second dip of recession could find their wishes come true.
Hard-hit residential markets will start to improve, especially multi-family construction, which is becoming more desirable as banks continue to tighten financing requirements and homeowners are still reeling from the fears of foreclosure. Lodging, office and commercial construction will continue to struggle until more Americans have good jobs. BD+C
Related Stories
Architects | Jun 25, 2021
AIA announces Small Project Award recipients
Now in its 18th year, the AIA Small Project Awards program recognizes small-project practitioners for the high quality of their work.
Architects | Jun 24, 2021
Post-pandemic, architects need to advocate harder for project sustainability
An AIA-Oldcastle report looks closer at the coronavirus’s impact on design and construction
Resiliency | Jun 24, 2021
Oceanographer John Englander talks resiliency and buildings [new on HorizonTV]
New on HorizonTV, oceanographer John Englander discusses his latest book, which warns that, regardless of resilience efforts, sea levels will rise by meters in the coming decades. Adaptation, he says, is the key to future building design and construction.
Multifamily Housing | Jun 23, 2021
COVID-19’s impact on multifamily amenities
Multifamily project teams had to scramble to accommodate the overwhelming demand for work-from-home spaces for adults and study spaces for children.
Architects | Jun 22, 2021
6 ways design can supercharge innovation in health sciences and medical education
It might sound radical, but the best way to achieve better collaboration is by eliminating traditional operational silos and the resulting departments.
K-12 Schools | Jun 20, 2021
Los Angeles County issues design guidelines for extending PreK-12 learning to the outdoors
The report covers everything from funding and site prep recommendations to whether large rocks can be used as seating.
Hotel Facilities | Jun 18, 2021
Adaptive reuse for hospitality, with Frank Cretella of Landmark Developers
In an exclusive interview for HorizonTV, Landmark Developers' President Frank Cretella talks about the firm's adaptive reuse projects for the hospitality sector. Cretella outlines his company's keys to success in hospitality development, including finding unique properties and creating memorable spaces.
Architects | Jun 16, 2021
BSB Design acquires California architectural firm Withee Malcolm
The acquisition marks a pivotal step in BSB Design’s long-term strategic plan.
Architects | Jun 15, 2021
Sandy Hook Permanent Memorial set to break ground
SWA Group designed the project.
Architects | Jun 15, 2021
Chicago Architecture Center and Chicago Architectural Club announce competition calling for new visions for State of Illinois “Thompson Center”
Competition seeks to give State of Illinois Center new life while preserving its architecture and public character.