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
| Jul 8, 2013
Learn from the world’s fastest animal: speed isn’t everything
Every schoolchild knows that the cheetah is the world’s fastest land animal—70 mph, no sweat. And, as we all know from National Geographic television documentaries, it is speed that makes Acinonyx jubatus such a fearsome hunter, right?
| Jul 3, 2013
Mid-year special: Top 13 stories for 2013 (so far)
Every six months, we like to take a look back at the stories that generated the most interest from our readers. Here's a roundup of the top 13 articles on BDCnetwork.com for the first six months of 2013.
| Jul 3, 2013
World's biggest freestanding building opens in China
Measuring a stout 100 meters high, 500 meters long, and 400 meters wide, the New Century Global Centre in the Tianfu New District of Chengdu, China, is officially the world's largest freestanding building.
| Jul 3, 2013
Mall of America will double in size after $2.5 billion expansion
The nation's largest indoor mall will undergo a $2.5 billion, 10-year expansion project that will add attractions like an NHL-sized skating rink and an indoor water park.
| Jul 3, 2013
Architects team with HUD to promote 'Rebuild By Design' competition for Hurricane Sandy recovery effort
The American Institute of Architects (AIA) today announced a communications campaign urging its membership to enter the “Rebuild by Design” multi-stage regional design competition announced by Department of Housing and Urban Development (HUD) Secretary Shaun Donovan on June 20.
| Jul 2, 2013
LEED v4 gets green light, will launch this fall
The U.S. Green Building Council membership has voted to adopt LEED v4, the next update to the world’s premier green building rating system.
| Jul 1, 2013
Firestone Building Products Company LLC Announces Sustainability Report
Firestone Building Products Company, LLC, the leading manufacturer of superior “Roots to Rooftops” products for commercial building performance solutions, today announced the release of its 2012 Sustainability Report. The report, the first for Firestone Building Products Company, covers the fiscal 2012 year and is available for download at firestonebpco.com.
| Jul 1, 2013
LEGOLAND builds 12-foot replica of One World Trade Center
The LEGOLAND Discovery Center Westchester in Yonkers, N.Y., celebrated the completion of a LEGO replica of One World Trade Center by lighting the 12-foot-tall, 100-pound model.
| Jul 1, 2013
Report: Global construction market to reach $15 trillion by 2025
A new report released today forecasts the volume of construction output will grow by more than 70% to $15 trillion worldwide by 2025.
| Jul 1, 2013
Elizabeth Chu Richter, FAIA, elected 2015 AIA President
Delegates to the American Institute of Architects (AIA) national convention in Denver elected Elizabeth Chu Richter (AIA Corpus Christi) to serve as the 2014 AIA first vice president/president-elect and 2015 AIA president.