flexiblefullpage

HORIZONTV FEATURING BD+C: WATCH EPISODES ON DEMAND AT HORIZONTV

Menu View Full Menu
Subscribe Here
billboard
interstitial1
catfish1
Currently Reading

As the U.S. economy sputters back to life, contractors wait for the green light on projects [2013 Giants 300 Report]

As the U.S. economy sputters back to life, contractors wait for the green light on projects [2013 Giants 300 Report]

There are enough positive indictors in the economy to justify greenlighting projects, but building owners and developers remain reluctant to pull the trigger. 

By David Barista, Editor-in-Chief | July 16, 2013
Completed in March 2012, the sleek office and prototype facility for global defe
Completed in March 2012, the sleek office and prototype facility for global defense contractor BAE Systems consolidates the companys operations in Sterling Heights, Mich. Walbridge was general contractor on the project, which involved building a 55,000-sf prototype center with 20 bays for vehicle and subsystem testing, and a 164,000-sf office structure to accommodate 600 employees. SmithGroupJJR was the AE firm on the project, providing architectural, structural, mechanical, and electrical services. PHOTO: COURTESY WALBRIDGE AND SMITHGROUPJJR
Continue Reading
The narrative of the U.S. nonresidential construction industry of the last 12 months has been one of growth, but in all the wrong places. While five of the 16 major construction sectors grew last year—some significantly—those that experienced the largest gains represent a relatively small portion of the overall market. On the flip side, several sectors that saw the steepest decline last year happen to make up a fairly sizable portion of nonresidential construction.
 
Lodging, for example, has been on a tear in recent months, growing 16.6% between April 2012 and April 2013 in order to meet the increase in business and leisure travel. Double-digit YOY growth is good news any way you look at it, but the fact that lodging represents just 2% of the overall market means it will do little to move the needle. Same goes for the transportation (11.4% growth), commercial (1.9%), and office (1.6%) sectors: their growth is muted by their relatively small size.
 
On the other hand, major sectors like education, power, and highway and street all saw a drop in construction spending last year.
 
“As a result, when you look at the aggregate, we’re not seeing much of a recovery in nonresidential construction spending,” said Anirban Basu, Chief Economist with the Associated Builders and Contractors (ABC) and Chairman and CEO with Sage Policy Group, during his recent mid-year construction forecast. 

TOP CONTRACTORS

 
2012 Total Revenue ($)
1 Turner Corporation, The $9,084,870,000
2 Fluor $4,268,290,500
3 Skanska USA $4,076,092,814
4 PCL Construction Enterprises $3,981,419,164
5 Whiting-Turner Contracting Co., The $3,699,782,771
6 Clark Group $3,563,246,719
7 Balfour Beatty $3,453,790,847
8 Gilbane $3,083,529,000
9 Structure Tone $2,947,433,000
10 McCarthy Holdings $2,546,000,000
 

TOP CONSTRUCTION MANAGEMENT FIRMS

 
2012 Total Revenue ($)
1 URS Corp. $297,282,076
2 STV $227,390,000
3 JE Dunn Construction $207,304,154
4 Barton Malow $182,697,897
5 Parsons Brinckerhoff $179,900,000
6 S. M. Wilson & Co. $168,859,740
7 Turner Corporation, The $157,920,000
8 Jones Lang LaSalle $140,020,000
9 LPCiminelli $139,198,329
10 Structure Tone $132,000,000
“What we’re seeing is a real dichotomy in the market. There is evidence of private-sector improvement in the data, but we also see strong evidence of constrained public-sector budgets affecting major markets like education and public safety,” he says.  
 
Basu predicted a 5-6% bump in total nonresidential construction spending in 2013, with the bulk of the gains coming from the commercial and industrial sectors. “It’s not terrible news, but given how far nonresidential activity had fallen, this is a really slow rebound at best,” he added.
 
Adding to the frustration of AEC firms, said Basu, is the reluctance of many building owners and developers to pull the trigger on new construction and renovation projects. He said there are enough positive indictors in the U.S. economy to justify greenlighting projects: 2% GDP growth this year, even with the sequestration measures taking hold; falling unemployment numbers; positive consumer spending and household wealth figures; an upturn in housing construction; near-historic-low interest rates; shrinking office and industrial vacancy rates; healthy hotel occupancy rates; and budget surpluses in some states.
 
“All of this suggests we should be in the midst of a fairly robust nonresidential construction recovery, but it’s simply not taking place,” said Basu, offering some possible explanations: uncertainty related to the Affordable Care Act; an investor community that remains largely skittish; slow population growth; troubled state and local government budgets; public pension concerns; high unemployment rates; European Union budget woes; and the overall rise in healthcare costs.
 
This mixed bag of positive and negative economic data translates into a gradual recovery for the nonresidential construction market.
 

Read BD+C's full Giants 300 Report

Tags

Related Stories

| Nov 12, 2014

Forbes: Houston is America's #1 construction hotspot

A new list of America's 20 biggest boomtowns shows Houston on top, with New York City close behind, followed by Dallas, Washington, D.C., and Los Angeles.

| Nov 11, 2014

Must see: Artist pairs up Hollywood icons with famous modern architecture

In his latest series, Federico Babina illustrated 17 iconic Hollywood personalities, from Marilyn Monroe to Michael Caine, interacting with famous 20th century homes. 

Renderings courtesy RPBW
| Nov 11, 2014

Renzo Piano's third building at London Bridge Quarter approved, will be built adjacent to the Shard

Renzo Piano Building Workshop has been granted planning approval for its residential building at London Bridge Quarter—a 26-story apartment tower dubbed Feilden House.

While the exposed ceiling look is popular in todays commercial office spaces, s
| Nov 10, 2014

5 guiding principles for solving airflow issues in open-plenum office spaces

Although architecturally appealing, exposed ceilings can create unwanted drafts and airflow problems if not engineered correctly. McGuire Engineers' Bill Stangeland offers tips for avoiding airflow issues on these projects.

| Nov 10, 2014

Clemson, Parsons architecture education programs honored for innovation, long-term impact

The architecture programs at Parsons The New School for Design and Clemson University have been selected as 2014 NCARB Award recipients for developing innovative curricula that merge practice and education. 

Renderings courtesy Herzog & De Meuron
| Nov 10, 2014

Herzog & De Meuron unveils plan for National Library of Israel

The library’s new home will be a completely new building in Jerusalem, and will combine the functions of a central research center, a venue for indoor and outdoor cultural and educational activities, and a place for digital experience.

A Marriott hotel in Orlando, Fla. Marriott is leading the U.S. hotel pipeline. P
| Nov 10, 2014

Hotel construction pipeline hits five-year high

The hotel construction pipeline hit a five-year high in the third quarter, clocking in at 3,516 projects and 443,936 rooms, Lodging Econometrics reports. 

The exterior design of the 21-story, LEED Silver MassArt Tree House was sugges
| Nov 7, 2014

Arts college uses creative financing to build 493-bed student housing

Many states have cut back funding for higher education in recent years, and securing money for new housing has been tougher than ever for many colleges and universities. A recent residence hall project in Boston involving three colleges provides an inspiring example of how necessity can spawn invention in financing strategies.

Precast units from Coreslab Structures (left) being put in place at Valparaiso (
| Nov 7, 2014

Prefab helps Valparaiso student residence project meet an ambitious deadline

Few colleges or universities have embraced prefabrication more wholeheartedly than Valparaiso (Ind.) University. The Lutheran-based institution completed a $27 million residence hall this past summer in which the structural elements were all precast.

Photo: Sardaka via Wikimedia Commons
| Nov 7, 2014

World's best new skyscraper: Sydney's vegetated One Central Park honored by CTBUH

The Jean Nouvel-designed tower tops the list of 88 entries in the 13th annual Council on Tall Buildings and Urban Habitat Awards.

boombox1
boombox2

Top Articles

native1

More In Category

Government Buildings

One of the country’s first all-electric fire stations will use no outside energy sources

Charlotte, N.C.’s new Fire Station #30 will be one of the country’s first all-electric fire stations, using no outside energy sources other than diesel fuel for one or two of the fire trucks. Multiple energy sources will power the station, including solar roof panels and geothermal wells. The two-story building features three truck bays, two fire poles, dispatch area, contamination room, and gear storage.

halfpage1

Most Popular Content

  1. 2021 Giants 400 Report
  2. Top 150 Architecture Firms for 2019
  3. 13 projects that represent the future of affordable housing
  4. Sagrada Familia completion date pushed back due to coronavirus
  5. Top 160 Architecture Firms 2021