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
| Feb 25, 2014
NYC's Hudson Spire would be nation's tallest tower if built
Design architect MJM + A has released an updated design scheme for the planned 1,800-foot-tall, superthin skyscraper.
| Feb 24, 2014
White Paper: Using social media to build your business
This white paper from Benjamin Moore provides practical guidance for building and sustaining an effective online presence, with the ultimate goal of helping your painting business become more successful.
| Feb 24, 2014
First look: UC San Diego opens net-zero biological research lab
The facility is intended to be "the most sustainable laboratory in the world," and incorporates natural ventilation, passive cooling, high-efficiency plumbing, and sustainably harvested wood.
| Feb 24, 2014
White Paper: The science of color and light
This white paper from Benjamin Moore provides an overview of the properties of color and light, along with practical guidance on how the relationship between the two affects design choices.
| Feb 21, 2014
Naturally ventilated hospital planned in Singapore
The Ng Teng Fong General Hospital will take advantage of the region's prevailing breezes to cool the spaces.
| Feb 21, 2014
Calatrava ordered to pay millions for 'shortcomings in his work' on conference center project
Famed architect Santiago Calatrava must pay 2.9 million euros due to faulty design work on the Palacio de Congresos project in Oviedo, Spain.
| Feb 21, 2014
First look: Goettsch Partners reveals 'lighthouse' tower scheme for China resort
Topped with glowing beacon that will be visible for miles in any direction, the Rosewood Sanya tower is the centerpiece of a new resort and meeting complex on China’s Hainan Island.
| Feb 20, 2014
5 myths about cross laminated timber
A CLT expert clears up several common misconceptions and myths surrounding the use of wood as a building material.
Sponsored | | Feb 20, 2014
Chicago’s historic Wrigley Building renovated to attract tech companies
Purchased in 2011 by a consortium of investors led by BDT Capital Partners, the building’s new owners have recently renovated and reimagined the next life for this architectural landmark—as a hub for tech firms.
| Feb 20, 2014
World's longest desk? Massive, undulating desk accommodates 145 office workers [video]
The desk is built from plywood and one continuous sheet of resin, and can serve all 145 office employees at once.