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 13, 2014
Why you should start with a builder
They say the best way to eat an elephant is one bite at a time. Expanding your building or constructing a new structure for your business, church, or school isn’t all that different. Attacking it is best done in small, deliberate pieces.
| Feb 13, 2014
Related Companies, LargaVista partner to develop mixed-use tower in SoHo
The site is located at the gateway to the booming SoHo retail market, where Class A office space is scarce yet highly in demand.
| Feb 12, 2014
First Look: Futuristic Silicon Valley campus designed to draw tech startups
The curved campus will consist of four different buildings, one exclusively for amenities like a coffee bar, bike shop, and bank.
| Feb 12, 2014
IIT's College of Architecture launches the Mies Crown Hall Americas Prize
Awarded biennially with a $50,000 prize, the program will recognize the most distinguished architectural works built on the North and South American continents in the preceding two years.
| Feb 11, 2014
Adobe Photoshop update features new 3D printing capabilities
Available as part of an update to Photoshop Creative Cloud, the tool enables users to easily and reliably build, refine, preview, prepare, and print 3D designs.
| Feb 10, 2014
Proposed parking garage will sandwich vehicles between housing and retail space
Architecture firm Brisac Gonzalez says that the design "will introduce different activities after parking hours."
| Feb 10, 2014
Architecture Design Collaborative announces firm opening in Southern California
Today, Architecture Design Collaborative officially announces the launch of its firm providing a full range of architecture and interior design services nationwide. Architecture Design Collaborative offers architectural design services, comprehensive interior design services, developer collaboration, direct tenant improvement, repositioning and site planning.
| Feb 10, 2014
Ball State to host Geothermal Conference on design, drilling and equipment - April 10, 2014
To best serve the industry, Ball State University has organized a single day conference in which participants will be able to exchange technical notes, develop understandings and share experiences with design, drilling, and equipment issues related to geothermal ground source heat pump technology.
| Feb 7, 2014
DOE, Autodesk team to overhaul the EnergyPlus simulation program
The update will allow a larger ecosystem of developers to contribute updates to the code in order to improve performance and decrease the time required to run energy model simulations.
| Feb 7, 2014
Meet the new Fellows: AIA elevates 143 to College of Fellows
The AIA College of Fellows is an honor awarded to members who have made significant contributions to the architectural profession.