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

building exterior
| Oct 30, 2013

11 hot BIM/VDC topics for 2013

If you like to geek out on building information modeling and virtual design and construction, you should enjoy this overview of the top BIM/VDC topics.

| Oct 29, 2013

Increased backlogs, margins lead to renewed optimism in global construction

After prolonged economic uncertainty, a majority of executives in the global engineering and construction sector have fresh confidence in the growth prospects for the industry, according to KPMG International's 2013 Global Construction Survey. A general increase in backlogs and margins is giving cause for optimism across the industry, with further growth anticipated.

A series of three double-level bridges spans the dry dock, serving both as an ur
| Oct 29, 2013

BIG opens subterranean Danish National Maritime Museum [slideshow]

BIG (Bjarke Ingels Group) has completed the Danish National Maritime Museum in Helsingør. By marrying the crucial historic elements with an innovative concept of galleries and way-finding, BIG’s renovation scheme reflects Denmark's historical and contemporary role as one of the world's leading maritime nations.

| Oct 28, 2013

Urban growth doesn’t have to destroy nature—it can work with it

Our collective desire to live in cities has never been stronger. According to the World Health Organization, 60% of the world’s population will live in a city by 2030. As urban populations swell, what people demand from their cities is evolving.

| Oct 28, 2013

Metal roofs are topping more urban dwellings

Given their durability and ease of use, metal roofs have been a common feature on rural houses for decades. Now they’re becoming an increasingly popular choice on urban dwellings as well. 

| Oct 25, 2013

Hoffmann Architects announces launch of U.S. Capitol Dome restoration

The Architect of the Capitol will undertake comprehensive restoration of the 150-year-old cast iron Dome, which has not undergone a complete restoration since 1959-1960.

| Oct 23, 2013

AIA: Crowd-funding shows promise for financing real estate projects

The American Institute of Architects issued a statement on the SEC's recent 5-0 vote to propose rules aimed at letting startups tap large numbers of ordinary investors for small amounts of capital. 

| Oct 23, 2013

Gehry, Foster join Battersea Power Station redevelopment

Norman Foster and Frank Gehry have been selected to design a retail section within the £8 billion redevelopment of Battersea Power Station in London.

| Oct 23, 2013

Some lesser-known benefits of metal buildings

While the durability of metal as a construction material is widely recognized, some of its other advantages are less commonly acknowledged and appreciated.  

| Oct 23, 2013

Architecture Billings Index hits seven-month high in September

AIA's Architecture Billings Index was 54.3 in September, the highest level since February 2013 

boombox1
boombox2

Top Articles

native1

More In Category

Student Housing

The University of Michigan addresses a decades-long student housing shortage with a new housing-dining facility

The University of Michigan has faced a decades-long shortage of on-campus student housing. In a couple of years, the situation should significantly improve with the addition of a new residential community on Central Campus in Ann Arbor, Mich. The University of Michigan has engaged American Campus Communities in a public-private partnership to lead the development of the environmentally sustainable living-learning student community.

Adaptive Reuse

Empty mall to be converted to UCLA Research Park

UCLA recently acquired a former mall that it will convert into the UCLA Research Park that will house the California Institute for Immunology and Immunotherapy at UCLA and the UCLA Center for Quantum Science and Engineering, as well as programs across other disciplines. The 700,000-sf property, formerly the Westside Pavilion shopping mall, is two miles from the university’s main Westwood campus. Google, which previously leased part of the property, helped enable and support UCLA’s acquisition.

Geothermal Technology

Rochester, Minn., plans extensive geothermal network

The city of Rochester, Minn., home of the famed Mayo Clinic, is going big on geothermal networks. The city is constructing Thermal Energy Networks (TENs) that consist of ambient pipe loops connecting multiple buildings and delivering thermal heating and cooling energy via water-source heat pumps.

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