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

Cuyahoga Riverfront Master Plan Cleveland Rendering courtesy Adjaye Associates
Urban Planning | Jan 18, 2023

David Adjaye unveils master plan for Cleveland’s Cuyahoga Riverfront

Real estate developer Bedrock and the city of Cleveland recently unveiled a comprehensive Cuyahoga Riverfront master plan that will transform the riverfront. The 15-to-20-year vision will redevelop Tower City Center, and prioritize accessibility, equity, sustainability, and resilience.

Niagara Falls Visitor Center aerial shot. Courtesy GWWO
Museums | Jan 18, 2023

Building memory: Why interpretive centers matter in an era of social change

The last few years have borne witness to some of the most rapid cultural shifts in our nation’s long history. If the experience has taught us anything, it is that we must find a way to keep our history in view, while also putting it in perspective.

ProConnect Single Family event - pan shot
ProConnect Events | Jan 17, 2023

3 ProConnect Single Family events for Home Builders and Product Manufacturers set for 2023

SGC Horizon, parent company of ProBuilder, will present 3 ProConnect Single Family Events this year. At ProConnect Single Family, Home Builders meet in confidential 20-minute sessions with Building Product Manufacturers to discuss upcoming projects, learn about new products, and discover practical solutions to technical problems.

Texas Christian University planning medical school for the growing Dallas-Fort Worth region
University Buildings | Jan 17, 2023

Texas Christian University breaks ground on medical school for Dallas-Fort Worth region

Texas Christian University (TCU) has broken ground on the Anne Burnett Marion School of Medicine, which aims to help meet the expanding medical needs of the growing Dallas-Fort Worth region.

Top 10 U.S. states for green building in 2022 Photo: David Mark via Pixabay
Green | Jan 17, 2023

Top 10 U.S. states for green building in 2022

The U.S. Green Building Council (USGBC) released its annual ranking of U.S. states leading the way on green building, with Massachusetts topping the list. The USGBC ranking is based on LEED-certified gross square footage per capita over the past year. 

Shanghai Library East: One of the world’s largest new libraries opens in Shanghai Credit RAWVISION
Libraries | Jan 13, 2023

One of the world’s largest new libraries opens in Shanghai

Designed by Schmidt Hammer Lassen Architects, Shanghai Library East covers more than 1.2 million sf, 80% of it dedicated to community activity.

St. Nicholas Greek Orthodox Church and National Shrine and public plaza overlooking reflecting pools. Photo: © Alan Karchmer for Santiago Calatrava
Religious Facilities | Jan 9, 2023

Santiago Calatrava-designed St. Nicholas Greek Orthodox Church opens in New York

In December, New York saw the reopening of the new St. Nicholas Greek Orthodox Church and National Shrine—the only religious structure destroyed on 9/11. Renowned architect and engineer Santiago Calatrava designed St. Nicholas Church to address the traditional Greek Orthodox liturgy while honoring the Church’s connection with the World Trade Center Memorial site.

Blackstone, Starwood among real estate giants urging President Biden to repurpose unused federal office space for housing Photo: Pixabay
Government Buildings | Jan 9, 2023

Blackstone, Starwood among real estate giants urging President Biden to repurpose unused federal office space for housing

The Real Estate Roundtable, a group including major real estate firms such as Brookfield Properties, Blackstone, Empire State Realty Trust, Starwood Capital, as well as multiple major banks and CRE professional organizations, recently sent a letter to President Joe Biden on the implications of remote work within the federal government.

1930 Broadway in New York City, where Glenwood Management first installed CarbonQuest's system. Photo courtesy CarbonQuest
Sustainability | Jan 9, 2023

Innovative solutions emerge to address New York’s new greenhouse gas law

New York City’s Local Law 97, an ambitious climate plan that includes fines for owners of large buildings that don’t significantly reduce carbon emissions, has spawned innovations to address the law’s provisions.

Why lithium-ion batteries pose fire safety concerns for buildings Photo courtesy Michael Fousert via Unsplash
Fire and Life Safety | Jan 9, 2023

Why lithium-ion batteries pose fire safety concerns for buildings

Lithium-ion batteries have become the dominant technology in phones, laptops, scooters, electric bikes, electric vehicles, and large-scale battery energy storage facilities. Here’s what you need to know about the fire safety concerns they pose for building owners and occupants.

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