Uncertainty about government spending clouds an otherwise positive economic outlook among 59 middle market construction firms polled recently by GE Capital.
Those firms—which average 652 employees and $144.6 million in annual revenue—are particularly confident about U.S. and local markets, though less so about the global arena. Only 12% of those polled said they were “extremely confident” about the condition of global economies, versus 21% who felt the same way about the U.S. economy, and 42% who liked what they were seeing about their local economies.
The firms’ confidence reflects their financial performance. Seven of 10 respondents reported improvements in their companies’ financials as of September 2014, versus fewer than three in five polled last March.
However, while half of the construction firms surveyed said they were hiring more people, the number was slightly down from the 57% who were hiring last March. The good news is that nearly half of the firms polled—47%—expect the construction industry to expand through September 2015, during which construction-related employment is expected to increase by 5.4%.
The survey’s respondents see the energy sector as holding out the greatest potential for future construction projects and hiring. Office and residential projects are also expected to be stronger. But a lot of these firms’ optimism seems contingent on public works spending, which “continues to have an immense impact on the industry and is a key consideration in expenditure decisions,” according to GE Capital.
Another factor that is likely to impact construction firms’ profitability is the direction that healthcare costs take. One-third of respondents are anticipating an increasing cost structure. Still, the respondents expect their margins to grow by average of 3.7% over the next year, which greatly exceeds the 0.2% growth that respondents were projecting last March.
GE Capital produces its quarterly surveys in cooperation with the National Center for the Middle Market, a multiyear partnership between GE Capital and Ohio State University’s Fisher College of Business. For more information about construction and other industries, visit gecapital.com/cxosurvey.
Related Stories
| Aug 17, 2022
New York to deploy 30,000 window-sized electric heat pumps in city-owned apartments
New York officials recently announced the state and the city will invest $70 million to roll out 30,000 window-sized electric heat pumps in city-owned apartments.
| Aug 17, 2022
IBM’s former office buildings in Boca Raton turn into a modern tech campus
Built in 1968, the Boca Raton Innovation Campus (BRiC), at 1.7 million square feet, is the largest office campus in Florida.
| Aug 16, 2022
DOE funds 18 projects developing tech to enable buildings to store carbon
The Department of Energy announced $39 million in awards for 18 projects that are developing technologies to transform buildings into net carbon storage structures.
| Aug 16, 2022
Multifamily holds strong – for now
All leading indicators show that the multifamily sector is shrugging off rising interest rates, inflationary pressures and other economic challenges, and will continue to be a torrid market for design and construction firms for at least the rest of 2022.
| Aug 16, 2022
Cedars-Sinai Urgent Care Clinic’s high design for urgent care
The new Cedars-Sinai Los Feliz Urgent Care Clinic in Los Angeles plays against type, offering a stylized design to what are typically mundane, utilitarian buildings.
| Aug 15, 2022
IF you build it, will they come? The problem of staff respite in healthcare facilities
Architects and designers have long argued for the value of respite spaces in healthcare facilities.
| Aug 15, 2022
Boston high-rise will be largest Passive House office building in the world
Winthrop Center, a new 691-foot tall, mixed-use tower in Boston was recently honored with the Passive House Trailblazer award.
Architects | Aug 12, 2022
Goettsch Partners names James Zheng, CEO, and Paul de Santis, Co-design Director
Global architecture firm Goettsch Partners (GP) announces that James Zheng, AIA, LEED AP, has been named CEO, and Paul De Santis, Assoc. AIA, LEED AP, joins James Goettsch, FAIA, as co-design directors for the practice. As the primary partners in the firm, the three have worked closely together for more than 17 years. Goettsch will also continue to serve as chairman while Zheng now assumes the full CEO title as well as president.
| Aug 12, 2022
Monthly Construction Input Prices Decreased 2% in July, Up 17% From a Year Ago, Says ABC
Construction input prices decreased 1.8% in July compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data released today.
Hotel Facilities | Aug 12, 2022
Denver builds the nation’s first carbon-positive hotel
Touted as the nation’s first carbon-positive hotel, Populus recently broke ground in downtown Denver.