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
| Jul 25, 2016
Top 35 Engineering/Architecture Firms
AECOM, Jacobs, and Thornton Tomasetti head Building Design+Construction's 2016 ranking of the largest engineering/architecture firms in the United States.
| Jul 25, 2016
Top 100 Architecture Firms
Gensler surpasses $1.1 billion in revenue, topping Building Design+Construction’s annual ranking of the nation’s largest architecture firms, as reported in the 2016 Giants 300 Report.
Healthcare Facilities | Jul 25, 2016
AIA selects seven winners of healthcare building design award
The National Healthcare Design Awards recognizes functional hospital projects that solve aesthetic, civic, urban, and social concerns. Recipients were selected in three categories this year.
Industrial Facilities | Jul 25, 2016
Snøhetta, Bjarke Ingels among four finalists for S.Pellegrino bottling plant design
A committee will evaluate proposals in September.
Architects | Jul 22, 2016
5 creative approaches to finish standards
With the right mindset, standards can produce great design for healthcare facilities, as VOA's Candace Small explores.
Retail Centers | Jul 21, 2016
MVRDV designs Seoul entertainment district with gold entrance and curtain façade
The 9,800-sm complex will have retail and nightclub space. A plaza separates the two concrete buildings.
Healthcare Facilities | Jul 20, 2016
Process mapping simplifies healthcare design
Charting procedures and highlighting improvement opportunities can lead to developing effective design strategy simulations. GS&P’s Ray Wong writes that process mapping adds value to a project and bolsters team and stakeholder collaboration.
Architects | Jul 20, 2016
AIA: Architecture Billings Index remains on solid footing
The June ABI score was down from May, but the figure was positive for the fifth consecutive month.
| Jul 19, 2016
2016 GIANTS 300 REPORT: Ranking the nation's largest architecture, engineering, and construction firms
Now in its 40th year, BD+C’s annual Giants 300 report ranks AEC firms by discipline and across more than 20 building sectors and specialty services.
Architects | Jul 18, 2016
17 buildings designed by Le Corbusier added to UNESCO World Heritage List
The sites are spread across seven counties and were built over the course of 50 years. Le Corbusier, an architect, designer, and urban planner, was a founder of modern architecture.