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
Giants 400 | Sep 3, 2019
Top 140 K-12 School Sector Architecture Firms for 2019
DLR Group, PBK, Huckabee, Stantec, and VLK Architects top the rankings of the nation's largest K-12 school sector architecture and architecture engineering (AE) firms, as reported in Building Design+Construction's 2019 Giants 300 Report.
Market Data | Sep 3, 2019
Nonresidential construction spending slips in July 2019, but still surpasses $776 billion
Construction spending declined 0.3% in July, totaling $776 billion on a seasonally adjusted annualized basis.
Giants 400 | Aug 30, 2019
2019 K-12 School Giants Report: 360-degree learning among top school design trends for 2019
K-12 school districts are emphasizing practical, hands-on experience and personalized learning.
Giants 400 | Aug 28, 2019
Top 35 Data Center Architecture Firms for 2019
Corgan, HDR, Gensler, AECOM, and Page top the rankings of the nation's largest data center sector architecture and architecture engineering (AE) firms, as reported in Building Design+Construction's 2019 Giants 300 Report.
AEC Innovators | Aug 27, 2019
7 AEC industry disruptors and their groundbreaking achievements
From building prefab factories in the sky to incubating the next generation of AEC tech startups, our 2019 class of AEC Innovators demonstrates that the industry is poised for a shakeup. Meet BD+C’s 2019 AEC Innovators.
Giants 400 | Aug 16, 2019
2019 Healthcare Giants Report: The ‘smart hospital’ is on the horizon
These buildings perform functions like a medical practitioner. This and more healthcare sector trends from Building Design+Construction's 2019 Giants 300 Report.
AEC Innovators | Aug 15, 2019
Oracle’s replica of a construction jobsite creates an immersive environment for AEC professionals
The Oracle Construction and Engineering Innovation Lab allows visitors to walk through five different stages of construction work, to test new AEC technologies and training techniques.
Giants 400 | Aug 15, 2019
Top 140 Multifamily Sector Architecture Firms for 2019
Humphreys & Partners, KTGY, SCB, CallisonRTKL, and Perkins Eastman top the rankings of the nation's largest multifamily sector architecture and architecture engineering (AE) firms, as reported in Building Design+Construction's 2019 Giants 300 Report.
Giants 400 | Aug 13, 2019
2019 Science + Technology Giants Report: Operational flexibility is a must for S+T buildings
The science and technology (S+T) sector is arguably the industry’s most complex because it caters to a diverse clientele with specific priorities and imperatives, according to Building Design+Construction's 2019 Giants 300 Report.
Architects | Aug 12, 2019
AIA, NCARB help launch coalition to represent complex professions and licensing boards
Architects, registration boards, and others join effort to ensure a unified voice for professions in growing debate around licensure, regulation, and public safety.
