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
Sponsored | Building Team | Jun 20, 2017
Plan ahead when building in the west
Getting a project through plan review can be an unusually long process, anywhere from six months to two years.
Architects | Jun 19, 2017
Preparing to negotiate: Get your head in the game
Logical and well-planned steps to effective negotiation.
| Jun 13, 2017
Accelerate Live! talk: Is the road to the future the path of least resistance? Sasha Reed, Bluebeam (sponsored)
Bluebeam’s Sasha Reed discusses why AEC leaders should give their teams permission to responsibly break things and create ecosystems of people, process, and technology.
| Jun 13, 2017
Accelerate Live! talk: Incubating innovation through R&D and product development, Jonatan Schumacher, Thornton Tomasetti
Thornton Tomasetti’s Jonatan Schumacher presents the firm’s business model for developing, incubating, and delivering cutting-edge tools and solutions for the firm, and the greater AEC market.
| Jun 13, 2017
Accelerate Live! talk: The future of computational design, Ben Juckes, Yazdani Studio of CannonDesign
Yazdani’s Ben Juckes discusses the firm’s tech-centric culture, where scripting has become an every-project occurrence and each designer regularly works with computational tools as part of their basic toolset.
Industry Research | Jun 13, 2017
Gender, racial, and ethnic diversity increases among emerging professionals
For the first time since NCARB began collecting demographics data, gender equity improved along every career stage.
Architects | Jun 7, 2017
Build your very own version of Frank Lloyd Wright’s Guggenheim Museum with this new LEGO set
744 LEGO bricks are used to recreate the famous Wright design, including the 1992 addition.
Multifamily Housing | Jun 7, 2017
Multifamily visionary: The life and work of architect David Baker
For 35 years, architect David Baker has been a spirited voice for affordable housing, in San Francisco and beyond.
Architects | Jun 5, 2017
NCARB launches second alternative path to architect certification
Architects without a professional degree in architecture can now earn NCARB certification through an alternate path.
Architects | Jun 2, 2017
NELSON joins forces with Cope Linder and KA
More growth ahead, as NELSON expects to double its workforce and revenue this year.