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
| Dec 12, 2011
CRSI design awards deadline extended to December 31
The final deadline is extended until December 31st, with judging shortly thereafter at the World of Concrete.
| Dec 12, 2011
Mojo Stumer takes top honors at AIA Long Island Design Awards
Firm's TriBeCa Loft wins "Archi" for interior design.
| Dec 10, 2011
10 Great Solutions
The editors of Building Design+Construction present 10 “Great Solutions” that highlight innovative technology and products that can be used to address some of the many problems Building Teams face in their day-to-day work. Readers are encouraged to submit entries for Great Solutions; if we use yours, you’ll receive a $25 gift certificate. Look for more Great Solutions in 2012 at: www.bdcnetwork.com/greatsolutions/2012.
| Dec 10, 2011
Energy performance starts at the building envelope
Rainscreen system installed at the west building expansion of the University of Arizona’s Meinel Optical Sciences Center in Tucson, with its folded glass wall and copper-paneled, breathable cladding over precast concrete.
| Dec 10, 2011
Turning Balconies Outside In
Operable glass balcony glazing systems provide solution to increase usable space in residential and commercial structures.
| Dec 10, 2011
BIM tools to make your project easier to manage
Two innovations—program manager Gafcon’s SharePoint360 project management platform and a new BIM “wall creator” add-on developed by ClarkDietrich Building Systems for use with the Revit BIM platform and construction consultant—show how fabricators and owner’s reps are stepping in to fill the gaps between construction and design that can typically be exposed by working with a 3D model.
| Dec 9, 2011
BEST AEC FIRM 2011: Chapman Construction/Design
Taking sustainable practices to heart.