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

Atlantic Science Enterprise Centre (ASEC) exterior
Laboratories | Aug 24, 2023

Net-zero carbon science center breaks ground in Canada

Designed by Diamond Schmitt, the new Atlantic Science Enterprise Centre (ASEC) will provide federal scientists and partners with state-of-the-art space and equipment to collaborate on research opportunities.

Multigenerational family in multifamily residence concept
Multifamily Housing | Aug 24, 2023

A multifamily design for multigenerational living

KTGY’s Family Flat concept showcases the benefits of multigenerational living through a multifamily design lens.

Constructing multifamily housing buildings to Passive House standards can be done at cost parity -Photo by Ryan Franco on Unsplash
Multifamily Housing | Aug 23, 2023

Constructing multifamily housing buildings to Passive House standards can be done at cost parity

All-electric multi-family Passive House projects can be built at the same cost or close to the same cost as conventionally designed buildings, according to a report by the Passive House Network. The report included a survey of 45 multi-family Passive House buildings in New York and Massachusetts in recent years.

Photo by Varadh Jain on Unsplash - Gas industry drops legal challenge to heat pump requirement in Washington building code
Regulations | Aug 23, 2023

Gas industry drops legal challenge to heat pump requirement in Washington building code

Gas and construction industry groups recently moved to dismiss a lawsuit they had filed to block new Washington state building codes that require heat pumps in new residential and commercial construction. The lawsuit contended that the codes harm the industry groups’ business, interfere with consumer energy choice, and don’t comply with federal law. 

White House wants to ‘aggressively’ get federal workers back to the office
Government Buildings | Aug 23, 2023

White House wants to ‘aggressively’ get federal workers back to the office

The Biden administration wants to “aggressively” get federal workers back in the office by September or October. “We are returning to in-person work because it is critical to the well-being of our teams and will enable us to deliver better results for the American people,” according to an email by White House Chief of Staff Jeff Zients. The administration will not eliminate remote work entirely, though.

Charles Pankow Foundation releases free project delivery selection tool for building owners, developers, and project teams
Building Owners | Aug 23, 2023

Charles Pankow Foundation releases free project delivery selection tool for building owners, developers, and project teams

Building owners and project teams can use the new Building Owner Assessment Tool (BOAT) to better understand how an owner's decision-making profile impacts outcomes for different project delivery methods.

Parking garage with moving mural made of KINETICWALL panels
Transportation & Parking Facilities | Aug 23, 2023

California parking garage features wind-activated moving mural

A massive, colorful, moving mural creatively conceals a newly opened parking garage for a global technology company in Mountain View, Calif.

CRTKL Haikou International Duty-Free City airport, Top 115 Architecture Engineering Firms for 2023 Photo: Yihuai Hu, courtesy CRTKL/Arcadis
Giants 400 | Aug 22, 2023

Top 115 Architecture Engineering Firms for 2023

Stantec, HDR, Page, HOK, and Arcadis North America top the rankings of the nation's largest architecture engineering (AE) firms for nonresidential building and multifamily housing work, as reported in Building Design+Construction's 2023 Giants 400 Report.

2023 Giants 400 Report - Nvidia's new Voyager Building Photo: Jason O'Rear, Courtesy Teecom
Giants 400 | Aug 22, 2023

2023 Giants 400 Report: Ranking the nation's largest architecture, engineering, and construction firms

A record 552 AEC firms submitted data for BD+C's 2023 Giants 400 Report. The final report includes 137 rankings across 25 building sectors and specialty categories.

300 North Michigan Avenue BKL - Top 175 Architecture Firms for 2023
Giants 400 | Aug 22, 2023

Top 175 Architecture Firms for 2023

Gensler, HKS, Perkins&Will, Corgan, and Perkins Eastman top the rankings of the nation's largest architecture firms for nonresidential building and multifamily housing work, as reported in Building Design+Construction's 2023 Giants 400 Report.

boombox1
boombox2

Top Articles

native1

More In Category

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