Gilbane Building Company announced the Summer 2014 edition of its in-house economics report, Building for the Future — Construction Economics: Market Conditions in Construction. The report predicts rapid growth coupled with the lack of skilled, experienced labor and the ability to meet schedule will be some of the most important industry issues to address over the next few years.
“The good, if not, great news is that the most favorable, forward-looking conditions support expectations for strong industry growth in 2015,” said Ed Zarenski, a Gilbane estimating executive with more than 40 years in the construction business. “Very active markets will drive escalation to climb more rapidly than we have seen in six years.
“The challenge of anticipated workforce shortages will have a detrimental effect on labor cost, productivity, the ability to readily increase construction volume and the ability to complete projects on time," Zarenski added.
While construction spending for 2014 will finish the year 5.5% higher than 2013 and the unemployment rate in construction is down to 7.5%, the industry has been losing workers for more than five years, falling to low points in the third quarters of both 2012 and 2013.
Going forward, as the workload expands rapidly, the significant shortage of available skilled workers, as well as management-level personnel, will impact productivity and force extended work schedules. The report notes total construction spending will increase 7% for 2015, which is a good sign for future hiring, but highlights the need for workers to have the right training and skills.
Other report highlights include:
-
The workforce has never grown as fast as what will be needed to accommodate the rate of new construction growth predicted. Rapid workforce expansion leads to productivity losses.
-
Construction jobs are up 600,000, or 11% from the low point. However, new jobs plus added hours worked for the entire labor force shows total labor is up 18%. That means 40% of the total gains in labor in the past three years is due to added hours, not new jobs. That is the equivalent of nearly 400,000 jobs.
-
The average annual rate of new nonresidential construction starts for the most recent four months is $197 billion. The average for the same four months one year ago was $146 billion. It is expected to be higher in the next four months. This large increase in starts will result in a rapid increase in nonresidential buildings spending growth in the second half 2014 through 2015.
-
Residential construction will increase 12% in 2015, but non-building infrastructure will decrease 5%. Nonresidential buildings spending will grow 11%, led by commercial and office construction, both expected to be up 15% in 2015.
The report is available here.
Related Stories
Roofing | Jan 8, 2024
Researchers devise adaptive roof tile concept that adjusts to ambient temperatures
Scientists at the University of California Santa Barbara published a paper that proposes adaptive roof tile technology that can adjust to ambient temperatures. Using a wax motor, tiles could switch from a heating or cooling state enabling savings on heating and cooling costs.
MFPRO+ News | Jan 4, 2024
Bjarke Ingels's curved residential high-rise will anchor a massive urban regeneration project in Greece
In Athens, Greece, Lamda Development has launched Little Athens, the newest residential neighborhood at the Ellinikon, a multiuse development billed as a smart city. Bjarke Ingels Group's 50-meter Park Rise building will serve as Little Athens’ centerpiece.
MFPRO+ Special Reports | Jan 4, 2024
Top 10 trends in multifamily rental housing
Demographic and economic shifts, along with work and lifestyle changes, have made apartment living preferable for a wider range of buyers and renters. These top 10 trends in multifamily housing come from BD+C's 2023 Multifamily Annual Report.
Giants 400 | Jan 3, 2024
Top 200 Reconstruction Architecture Firms for 2023
Gensler, Stantec, HDR, Corgan, and PBK Architects top BD+C's ranking of the nation's largest building reconstruction/renovation architecture and architecture engineering (AE) firms for 2023, as reported in the 2023 Giants 400 Report.
Designers | Jan 3, 2024
Designing better built environments for a neurodiverse world
For most of human history, design has mostly considered “typical users” who are fully able-bodied without clinical or emotional disabilities. The problem with this approach is that it offers a limited perspective on how space can positively or negatively influence someone based on their physical, mental, and sensory abilities.
Giants 400 | Jan 2, 2024
Top 120 Hotel Architecture Firms for 2023
Gensler, WATG, HKS, DLR Group, and HBG Design top BD+C's ranking of the nation's largest hotel and resort architecture and architecture/engineering (AE) firms for 2023, as reported in Building Design+Construction's 2023 Giants 400 Report.
Resiliency | Jan 2, 2024
Americans are migrating from areas of high flood risk
Americans are abandoning areas of high flood risk in significant numbers, according to research by the First Street Foundation. Climate Abandonment Areas account for more than 818,000 Census Blocks and lost a total of 3.2 million-plus residents due to flooding from 2000 to 2020, the study found.
MFPRO+ News | Jan 2, 2024
New York City will slash regulations on housing projects
New York City Mayor Eric Adams is expected to cut red tape to make it easier and less costly to build housing projects in the city. Adams would exempt projects with fewer than 175 units in low-density residential areas and those with fewer than 250 units in commercial, manufacturing, and medium- and high-density residential areas from environmental review.
Contractors | Dec 22, 2023
DBIA releases two free DEI resources for AEC firms
The Design-Build Institute of America (DBIA) has released two new resources offering guidance and provisions on diversity, equity, and inclusion (DEI) on design-build projects.
MFPRO+ News | Dec 22, 2023
Document offers guidance on heat pump deployment for multifamily housing
ICAST (International Center for Appropriate and Sustainable Technology) has released a resource guide to help multifamily owners and managers, policymakers, utilities, energy efficiency program implementers, and others advance the deployment of VHE heat pump HVAC and water heaters in multifamily housing.