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
| Mar 23, 2011
AIA adds 13 new contract documents to Documents-on-Demand service
Web-based solution adds 13 popular Architect’s Scope of Services Documents to AIA Documents-on-Demand, providing easy access to documents anytime, anywhere.
| Mar 23, 2011
After 60 years of student lobbying, new activity center opens at University of Texas
The new Student Activity Center at the University of Texas campus, Austin, is the result of almost 60 years of students lobbying for another dedicated social and cultural center on campus. The 149,000-sf facility is designed to serve as the "campus living room," and should earn a LEED Gold certification, a first for the campus.
| Mar 23, 2011
Architecture Billings Index shows nominal increase
The American Institute of Architects (AIA) reported the February Architecture Billings Index score was 50.6, up slightly from a reading of 50.0 the previous month. This score reflects a modest increase in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 56.4, compared to a mark of 56.5 in December.
| Mar 22, 2011
The American National Standards Institute accredits Stantec for greenhouse gas verification
Stantec Consulting Ltd.’s Atmospheric Environment Group has been awarded accreditation by the American National Standards Institute (ANSI) for verification of assertions related to greenhouse gas (GHG) emissions. The Scope of Accreditation is for verification of emissions and removals at the organizational level for Group 1 – General.
| Mar 22, 2011
Mayor Bloomberg unveils plans for New York City’s largest new affordable housing complex since the ’70s
Plans for Hunter’s Point South, the largest new affordable housing complex to be built in New York City since the 1970s, include new residences for 5,000 families, with more than 900 in this first phase. A development team consisting of Phipps Houses, Related Companies, and Monadnock Construction has been selected to build the residential portion of the first phase of the Queens waterfront complex, which includes two mixed-use buildings comprising more than 900 housing units and roughly 20,000 square feet of new retail space.
| Mar 21, 2011
RATIO Architects announces merger with Cherry Huffman Architects
RATIO Architects, Inc. with studios in Indianapolis and Champaign, Ill., recently announced it has merged with prominent Raleigh, N.C., firm Cherry Huffman Architects.
| Mar 18, 2011
Universities will compete to build a campus on New York City land
New York City announced that it had received 18 expressions of interest in establishing a research center from universities and corporations around the world. Struggling to compete with Silicon Valley, Boston, and other high-tech hubs, officials charged with developing the city’s economy have identified several city-owned sites that might serve as a home for the research center for applied science and engineering that they hope to establish.
| Mar 17, 2011
Perkins Eastman launches The Green House prototype design package
Design and architecture firm Perkins Eastman is pleased to join The Green House project and NCB Capital Impact in announcing the launch of The Green House Prototype Design Package. The Prototype will help providers develop small home senior living communities with greater efficiency and cost savings—all to the standards of care developed by The Green House project.
| Mar 17, 2011
Hospitality industry turns to HTS Texas for ‘do not disturb’ air conditioned comfort
Large resort hotels and hospitality properties throughout the Southwest have been working with local contractors, engineers and HTS Texas for the latest innovations in quiet heating, ventilating and air conditioning (HVAC) equipment. The company has completed 12+ projects throughout Texas and the Southwestern U.S. over the past 18 to 24 months, and is currently working on six more hotel projects throughout the region.
