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 | Jan 2, 2024
Top 120 Hotel Architecture Firms for 2023
Gensler, WATG, HKS, DLR Group, and HBG Design top BD+C's ranking of the nation's largest hotel and resort architecture and architecture/engineering (AE) firms for 2023, as reported in Building Design+Construction's 2023 Giants 400 Report.
Resiliency | Jan 2, 2024
Americans are migrating from areas of high flood risk
Americans are abandoning areas of high flood risk in significant numbers, according to research by the First Street Foundation. Climate Abandonment Areas account for more than 818,000 Census Blocks and lost a total of 3.2 million-plus residents due to flooding from 2000 to 2020, the study found.
MFPRO+ News | Jan 2, 2024
New York City will slash regulations on housing projects
New York City Mayor Eric Adams is expected to cut red tape to make it easier and less costly to build housing projects in the city. Adams would exempt projects with fewer than 175 units in low-density residential areas and those with fewer than 250 units in commercial, manufacturing, and medium- and high-density residential areas from environmental review.
Contractors | Dec 22, 2023
DBIA releases two free DEI resources for AEC firms
The Design-Build Institute of America (DBIA) has released two new resources offering guidance and provisions on diversity, equity, and inclusion (DEI) on design-build projects.
MFPRO+ News | Dec 22, 2023
Document offers guidance on heat pump deployment for multifamily housing
ICAST (International Center for Appropriate and Sustainable Technology) has released a resource guide to help multifamily owners and managers, policymakers, utilities, energy efficiency program implementers, and others advance the deployment of VHE heat pump HVAC and water heaters in multifamily housing.
Sustainability | Dec 22, 2023
WSP unveils scenario-planning online game
WSP has released a scenario-planning online game to help organizations achieve sustainable development goals while expanding awareness about climate change.
Giants 400 | Dec 20, 2023
Top 160 Apartment and Condominium Architecture Firms for 2023
Gensler, Humphreys and Partners, Solomon Cordwell Buenz, and AO top BD+C's ranking of the nation's largest apartment building and condominium architecture and architecture/engineering (AE) firms for 2023, as reported in Building Design+Construction's 2023 Giants 400 Report.
Giants 400 | Dec 20, 2023
Top 90 Student Housing Architecture Firms for 2023
Niles Bolton Associates, Solomon Cordwell Buenz, BKV Group, and Humphreys and Partners Architects top BD+C's ranking of the nation's largest student housing facility architecture and architecture/engineering (AE) firms for 2023, as reported in Building Design+Construction's 2023 Giants 400 Report.
Healthcare Facilities | Dec 19, 2023
A new hospital in Duluth, Minn., is now the region’s largest healthcare facility
In Duluth, Minn., the new St. Mary’s Medical Center, designed by EwingCole, is now the largest healthcare facility in the region. The hospital consolidates Essentia Health’s healthcare services under one roof. At about 1 million sf spanning two city blocks, St. Mary’s overlooks Lake Superior, providing views on almost every floor of the world’s largest freshwater lake.
Government Buildings | Dec 19, 2023
New Pennsylvania State Archives building holds documents dating back to 1680
Work was recently completed on a new Pennsylvania State Archives building in Harrisburg, Penn. The HGA-designed, 146,000-sf facility offers numerous amenities, including computers, scanners, printers, a kitchenette with seating, lockers, a meeting room, a classroom, an interactive video wall, gallery, and all-gender restrooms. The features are all intended to provide a welcoming and comfortable environment for visitors.