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
Office Buildings | Jul 17, 2018
Transwestern report: Office buildings near transit earn 65% higher lease rates
Analysis of 15 major metros shows the average rent in central business districts was $43.48/sf for transit-accessible buildings versus $26.01/sf for car-dependent buildings.
Architects | Jul 10, 2018
AEC marketing fundamentals can still have a role in winning new business
In our Internet-fueled world, it’s easy to get distracted by the latest online tools. But the boring stuff is still important, and you don’t want to lose sight of old-school techniques that are just as persuasive now as they were a few decades ago.
Adaptive Reuse | Jul 9, 2018
Work, park, live: Inside Cincinnati’s parking garage turned lifestyle hotel
The Summit hotel and conference center is a converted parking garage that was once a factory.
Architects | Jun 28, 2018
Designing successful maker spaces
The challenge is to design makerspaces that work, spaces that function as a tool for educators to produce better students.
Architects | Jun 27, 2018
Steven A. Lichtenberger joins Leo A Daly as President
He will lead the firm’s global planning, architecture, engineering, and interiors practice worldwide.
Accelerate Live! | Jun 24, 2018
Watch all 19 Accelerate Live! talks on demand
BD+C’s second annual Accelerate Live! AEC innovation conference (May 10, 2018, Chicago) featured talks on AI for construction scheduling, regenerative design, the micro-buildings movement, post-occupancy evaluation, predictive visual data analytics, digital fabrication, and more. Take in all 19 talks on demand.
Building Team | Jun 22, 2018
What owners should know before choosing the design-build project delivery method
Outside of drawing up a well-written contract, owners often overlook a key attribute that can significantly impact the success of a design-build project, writes Skanska’s Julie Hyson.
Architects | Jun 14, 2018
Chicago Architecture Center sets Aug. 31 as opening date
The Center is located at 111 E. Wacker Drive.
Multifamily Housing | Jun 13, 2018
Multifamily visionaries: KTGY’s extraordinary expectations
KTGY Architecture + Planning keeps pushing the boundaries of multifamily housing design in the U.S., Asia, and the Middle East.
| Jun 11, 2018
Accelerate Live! talk: Regenerative design — When sustainability is not enough
In this 15-minute talk at BD+C’s Accelerate Live! conference (May 10, 2018, Chicago), HMC’s Eric Carbonnier poses the question: What if buildings could actually rejuvenate ecosystems?