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
High-rise Construction | Sep 3, 2015
Rafael Viñoly's 'Walkie-Talkie' tower named U.K.'s worst new building
The curved, glass tower at 20 Fenchurch Street in London has been known to reflect intense heat onto the streets below (in one instance damaging a car) and cause severe wind gusts.
Airports | Aug 31, 2015
Surveys gauge users’ satisfaction with airports
Several surveys gauge passenger satisfaction with airports, as flyers and airlines weigh in on technology, security, and renovations.
Airports | Aug 31, 2015
Small and regional airports in a dogfight for survival
Small and regional airports are in a dogfight for survival. Airlines have either cut routes to non-hub markets, or don’t provide enough seating capacity to meet demand.
Airports | Aug 31, 2015
Airports expand rental car facilities to ease vehicular traffic at their terminals
AEC teams have found fertile ground in building or expanding consolidated rental car facilities, which are the No. 1 profit centers for most airports.
Airports | Aug 31, 2015
Experts discuss how airports can manage growth
In February 2015, engineering giant Arup conducted a “salon” in San Francisco on the future of aviation. This report provides an insight into their key findings.
Healthcare Facilities | Aug 28, 2015
Hospital construction/renovation guidelines promote sound control
The newly revised guidelines from the Facilities Guidelines Institute touch on six factors that affect a hospital’s soundscape.
Healthcare Facilities | Aug 28, 2015
7 (more) steps toward a quieter hospital
Every hospital has its own “culture” of loudness and quiet. Jacobs’ Chris Kay offers steps to a therapeutic auditory environment.
Healthcare Facilities | Aug 28, 2015
Shhh!!! 6 ways to keep the noise down in new and existing hospitals
There’s a ‘decibel war’ going on in the nation’s hospitals. Progressive Building Teams are leading the charge to give patients quieter healing environments.
Architects | Aug 28, 2015
How to transition leadership within your architecture firm, Part 2
Close to retiring? Without a plan for leadership transition, you might not foster candidates who will be capable of taking over the reins, says Whitehorn Financial's Steve Whitehorn.
Retail Centers | Aug 27, 2015
Vallco Shopping Mall renovation plans include 'largest green roof in the world'
The new owners of the mall in Cupertino, Calif., intend to transform the outdated shopping mall into a multi-purpose complex, topped by a 30-acre park.