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
| Jan 8, 2015
The future of alternative work spaces: open-access markets, co-working, and in-between spaces
During the past five years, people have begun to actively seek out third places not just to get a day’s work done, but to develop businesses of a new kind and establish themselves as part of a real-time conversation of diverse entrepreneurs, writes Gensler's Shawn Gehle.
Smart Buildings | Jan 7, 2015
NIBS report: Small commercial buildings offer huge energy efficiency retrofit opportunities
The report identifies several barriers to investment in such retrofits, such as the costs and complexity associated with relatively small loan sizes, and issues many small-building owners have in understanding and trusting predicted retrofit outcomes.
| Jan 7, 2015
University of Chicago releases proposed sites for Obama library bid
There are two proposed sites for the plan, both owned by the Chicago Park District in Chicago’s South Side, near the university’s campus in Hyde Park, according to the Chicago Sun-Times.
| Jan 7, 2015
4 audacious projects that could transform Houston
Converting the Astrodome to an urban farm and public park is one of the proposals on the table in Houston, according to news site Houston CultureMap.
| Jan 7, 2015
How you can help improve the way building information is shared
PDFs are the de facto format for digital construction documentation. Yet, there is no set standard for how to produce PDFs for a project, writes Skanska's Kyle Hughes.
Smart Buildings | Jan 7, 2015
Best practices for urban infill development: Embrace the region's character, master the pedestrian experience
If an urban building isn’t grounded in the local region’s character, it will end up feeling generic and out-of-place. To do urban infill the right way, it’s essential to slow down and pay proper attention to the context of an urban environment, writes GS&P's Joe Bucher.
| Jan 6, 2015
Construction permits exceeded $2 billion in Minneapolis in 2014
Two major projects—a new stadium for the Minnesota Vikings NFL team and the city’s Downtown East redevelopment—accounted for about half of the total worth of the permits issued.
| Jan 6, 2015
Snøhetta unveils design proposal of the Barack Obama Presidential Center Library for the University of Hawaii
The plan by Snøhetta and WCIT Architecture features a building that appears square from the outside, but opens at one corner into a rounded courtyard with a pool, Dezeen reports.
| Jan 5, 2015
Another billionaire sports club owner plans to build a football stadium in Los Angeles
Kroenke Group is the latest in a series of high-profile investors that want to bring back pro football to the City of Lights.
| Jan 5, 2015
Beyond training: How locker rooms are becoming more like living rooms
Despite having common elements—lockers for personal gear and high-quality sound systems—the real challenge when designing locker rooms is creating a space that reflects the attitude of the team, writes SRG Partnership's Aaron Pleskac.
