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
| May 24, 2018
Accelerate Live! talk: The next frontier of post-occupancy evaluations
In this 15-minute talk at BD+C’s Accelerate Live! conference (May 10, 2018, Chicago), ZGF Architects’ Chris Chatto outlines methods for conducting meaningful, holistic evaluations from design to occupancy.
| May 24, 2018
Accelerate Live! talk: Security and the built environment: Insights from an embassy designer
In this 15-minute talk at BD+C’s Accelerate Live! conference (May 10, 2018, Chicago), embassy designer Tom Jacobs explores ways that provide the needed protection while keeping intact the representational and inspirational qualities of a design.
Resiliency | May 17, 2018
Architects brief lawmakers and policy-makers on disaster recovery as hurricane season approaches
Urge senate passage of disaster recovery reform act; Relationship-building with local communities.
Architects | May 14, 2018
4 tactics for our digital transformation
While our technology is becoming more advanced, the fundamental processes at the core of design and construction businesses have largely remained unchanged for decades.
Architects | May 8, 2018
WeWork names BIG’s Ingels as its Chief Architect
He’ll be plenty busy working with a company that has aggressive growth ambitions.
Architects | May 8, 2018
Illinois Office of Tourism unveils new Frank Lloyd Wright Trail
The trail stretches from Rockford to Springfield.
Architects | May 3, 2018
Designing innovative solutions for chronic homelessness
What’s stopping us from creating more Permanent Supportive Housing?
Architects | Apr 27, 2018
4 reasons to pursue speaking engagements
We found speaking engagements were among the top ten marketing techniques that AEC firms employ.
Office Buildings | Apr 19, 2018
From fitness to bowling alleys: How commercial office buildings are differentiating themselves through amenities
Here are five ways that amenities can help developers and building owners attract and secure tenants by appealing to their inhabitants.
Architects | Apr 19, 2018
Perkins Eastman and Dougherty announce intent to merge
Combined practice will create expanded capabilities for K-12, higher education projects in California.