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 14, 2013
Boxman Studios launches shipping container buildings division
Boxman Studios has launched a new division aimed at sustainable solutions for the Built Environment. The Boxman Studios Buildings Division will focus on the adaptive use of decommissioned shipping containers as architectural elements and even complete buildings.
Smart Buildings | Feb 14, 2013
Minneapolis joins energy benchmarking trend for commercial buildings
Minneapolis is the latest major metro to require large commercial buildings to benchmark and disclose their energy and water use.
| Feb 14, 2013
Peter Rutti named Director of Design of Westlake Reed Leskosky’s Phoenix studio
Peter W. Rutti, AIA, Associate Principal and Project Director of Westlake Reed Leskosky, has been appointed Director of Design of the Phoenix, Arizona studio of the nationally recognized architects, engineers, and technology designers. The announcement recognizes the design excellence, leadership, and continued growth of the national and international practice of the integrated design firm in the western region.
| Feb 14, 2013
Peter Bardwell named 2013 president of the American College of Healthcare Architects
The Board of Regents of the American College of Healthcare Architects (ACHA) has named Peter L. Bardwell, FAIA, FACHA of Columbus, Ohio as 2013 national President.
| Feb 13, 2013
Department store concept by OMA's Koolhaas, Alsaka draws inspiration from open-air Arab marketplaces
The Exhibition Hall, a retail concept planned in Kuwait City's 360° Mall, will meld cultural and commerce spaces in a series of galleries reminiscent of the long passages of the souq—traditional, open-air marketplaces found in Arab cities.
| Feb 13, 2013
China plans new car-free city
A new urban development near Chengdu, China, will provide new housing for ~80,000 people, surrounded by green space.
| Feb 13, 2013
Advanced urbanism is focus of new MIT research center
MIT Center for Advanced Urbanism will seek 21st Century planning solutions, starting with infrastructure design issues.
| Feb 13, 2013
'Vegetative tower' apartments to revive NYC site
A Manhattan site formerly slated for development with a "tower of cubes"—a now-defunct project by Santiago Calatrava—will be revived with a 998-foot, 300,000-sf apartment building by Morali Architects.
| Feb 13, 2013
Fast Company selects 'most innovative' architecture firms
Business innovation magazine Fast Company has released a list of 10 "most innovative" architectural practices, worldwide.