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
Giants 400 | Oct 11, 2023
Top 100 Industrial Sector Architecture Firms for 2023
Ware Malcomb, Arcadis, Stantec, and Gresham Smith top the ranking of the nation's largest industrial facility sector architecture and architecture/engineering (AE) firms for 2023, as reported in Building Design+Construction's 2023 Giants 400 Report.
Products and Materials | Oct 10, 2023
‘Works with WELL’ product licensing program launched by International WELL Building Institute
The International WELL Building Institute (IWBI) recently launched the Works with WELL product licensing program. Works with Well certification allows manufacturers to demonstrate that their products align with WELL strategies.
Mass Timber | Oct 10, 2023
New York City launches Mass Timber Studio to spur more wood construction
New York City Economic Development Corporation (NYCEDC) recently launched New York City Mass Timber Studio, “a technical assistance program to support active mass timber development projects in the early phases of project planning and design.”
Government Buildings | Oct 10, 2023
GSA names Elliot Doomes Public Buildings Service Commissioner
The U.S. General Services Administration (GSA) announced that the agency’s Public Buildings Service Commissioner Nina Albert will depart on Oct. 13 and that Elliot Doomes will succeed her.
Esports Arenas | Oct 10, 2023
Modular esports arena attracts more than gamers
As the esports market continues to grow to unprecedented numbers, more facilities are being developed by universities and real estate firms each year.
Higher Education | Oct 10, 2023
Tracking the carbon footprint of higher education campuses in the era of online learning
With more effective use of their facilities, streamlining of administration, and thoughtful adoption of high-quality online learning, colleges and universities can raise enrollment by at least 30%, reducing their carbon footprint per student by 11% and lowering their cost per student by 15% with the same level of instruction and better student support.
MFPRO+ News | Oct 6, 2023
Announcing MultifamilyPro+
BD+C has served the multifamily design and construction sector for more than 60 years, and now we're introducing a central hub within BDCnetwork.com for all things multifamily.
Giants 400 | Oct 5, 2023
Top 175 Healthcare Architecture Firms for 2023
HDR, HKS, CannonDesign, Stantec, and SmithGroup top BD+C's ranking of the nation's largest healthcare sector architecture and architecture/engineering (AE) firms for 2023, as reported in Building Design+Construction's 2023 Giants 400 Report. Note: This ranking includes revenue related to all healthcare buildings work, including hospitals, medical office buildings, and outpatient facilities.
Biophilic Design | Oct 4, 2023
Transforming the entry experience with biophilic design
Vessel Architecture & Design's Cassandra Wallace, AIA, NCARB, explores how incorporating biophilic design elements and dynamic lighting can transform a seemingly cavernous entry space into a warm and inviting focal point.
Regulations | Oct 4, 2023
New York adopts emissions limits on concrete
New York State recently adopted emissions limits on concrete used for state-funded public building and transportation projects. It is the first state initiative in the U.S. to enact concrete emissions limits on projects undertaken by all agencies, according to a press release from the governor’s office.