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

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

SEE FULL LIST

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

SEE FULL LIST

“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

Founders Hall at the University of Washington Foster School of Business, the first mass timber building at Seattle campus of Univ. of Washington, was recently completed. The 84,800-sf building creates a new hub for community, entrepreneurship, and innovation, according the project’s design architect LMN Architects.

SOM presented its “Urban Sequoias” concept (how buildings can absorb carbon) at the UN COP26 conference. Rendering © SOM | Miysis

Architects | Nov 10, 2022

What’s new at 173 architecture firms for 2022

More than 295 U.S. architecture and architecture-engineering (AE) firms participated in BD+C's 2022 Giants 400 survey. As part of the Giants survey process, participating firms are asked to describe their most impactful firm innovations and noteworthy company moves in the past 12 months. Here is a collection of the most compelling business and project innovations and business moves from the 2022 Architecture Giants.

Giants 400 | Nov 9, 2022

Top 30 Data Center Architecture + AE Firms for 2022

HDR, Corgan, Sheehan Nagle Hartray Architects, and Gensler top the ranking of the nation's largest data center architecture and architecture/engineering (AE) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report.

Top 75 Sports Facility Engineering and EA Firms for 2022 chris-chow-yPgmYU1aZvE-unsplash

Giants 400 | Nov 8, 2022

Top 110 Sports Facility Architecture and AE Firms for 2022

Populous, HOK, Gensler, and Perkins and Will top the ranking of the nation's largest sports facility architecture and architecture/engineering (AE) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report.