Most economists say the U.S. is slowly emerging from the Great Recession, a view that was confirmed to some extent by an exclusive survey of 498 BD+C subscribers whose views we sought on the commercial construction industry’s outlook on business prospects for 2013.
The majority (52.2%) of respondents—architects, engineers, contractors, buildings owners, and others in the commercial, industrial, and institutional field—said their firms were in at least “good” financial health, compared to 49.7% last year.
But a markedly strong showing (86.4%) said their firms would be up in revenues or would at least hold steady in 2013, versus 80.2% last year—an increase that may be not only statistically significant but also most certainly welcome for an industry that could use a bit of cheering.
As was the case last year, more than three-fourths of respondents (75.7%) rated “general economic conditions (i.e., recession)” as the most important concern their firms will face in 2013—roughly comparable to the 78.4% who responded that way last year.
Economy Remains Top Concern for ’13
2013 2012
General economic conditions 75.7% 78.4%
Competition from other firms 44.9% 40.1%
Managing cash flow 37.6% 33.7%
Insufficient capital funding for projects 29.7% 34.5%
Softness in fees/bids 29.7% 28.0%
Government regulations/restrictions 26.6% 23.0%
Price increases (e.g., materials, services)15.7% 18.1%
Avoiding layoffs 16.4% 14.3%
Keeping staff motivated 14.3% 14.3%
Avoiding benefit reductions 11.9% 12.5%
Other factors were largely within the same range as last year, given the margin of error (about 3.5-4%). Competition from other firms (44.9%) went up slightly (from 40.1% in 2011), while having insufficient capital funding for projects declined a bit, to 29.7%, from 34.5% the year before. For both years, nearly three in four (73.4% this year, 74.8% in 2011) described the current business situation for their firms as “very” to “intensely” competitive—further evidence that AEC firms are still struggling for every dollar.
HEALTHCARE, DATA CENTERS LOOK PROMISING FOR ’13
Respondents were asked to rate their firms’ prospects in specific construction sectors on a five-point scale from “excellent” to “very weak.” (Respondents who checked “Not applicable/No opinion/Don’t know” are not counted here.) Among the findings:
- Healthcare continued to be the most highly rated sector, with nearly three-fifths of respondents (58.8%, vs. 54.6% last year) giving it a “good” to “excellent” rating.
- Data centers and mission-critical facilities were also up, with the majority of respondents (52.1%) in the good/excellent category, compared to 45.2% last year
- Senior and assisted-living facilities made a big jump, from last year’s 37.8% of respondents in the good/excellent category, to a majority this year, at 50.5%.
- Government and military work was rated good to excellent by 36.1% of respondents, down slightly from last year’s 41.1%.
- University/college facilities were rated good to excellent by 37.8% of respondents, versus 32.3% in 2011.
- Retail commercial construction got a slight vote of confidence, with nearly one-fifth of respondents (19.9%) stating they thought their firms would have a good to excellent year, nearly double last year’s 11.1%.
- Industrial and warehouse facilities might be staging a comeback: One-fourth (25.5%) of respondents whose firms engaged in that sector said they expect a good to excellent year in 2013; on the other hand, 35.8% said it would be weak or very weak.
Reconstruction—including historic preservation and renovations—accounted for at least 25% of work for more than a third (34.6%) of respondents’ firms, roughly the same as last year (36.3%). Office interiors and fitouts were down, with only 35.7% of this year’s respondents saying this sector would be good to excellent, compared to 42.7% last year.
The prospects for office buildings looked bleak, however, with only 15.6% saying that market would be good to excellent. The majority (55.2%) predicted office buildings would be “weak” or “very weak,” but that’s an improvement from 2011’s 67.3%.
The K-12 sector looked basically flat, with good/excellent responses from 22.9% of respondents this year, compared to 23.2% last year.
As for the use of building information modeling, one-fifth (20.2%) said their firm did not use BIM, about the same as in 2011 (20.6%). Of those who said their firms used BIM, a healthy 26.8% said BIM was used in the majority of projects, based on dollar value—precisely the same as last year. Only a few saw the use of BIM declining in the coming year. Nearly two-fifths (39.0%) of respondents said their companies would be beefing up their investments in technology.
On the communications front, nearly a third of respondents (32.9%) said they did not use social media. Of those who said they did, LinkedIn was the clear choice, at 85.1%, with Facebook in second place (49.5%) and Twitter bringing up the rear (21.1%).
Note: Of the 428 who gave their professional description, 42.1% were architects; 18.7%, engineers; 23.8%, contractors; 5.6% building owners, developers, or facility/property managers; and 9.8%, consultants or “other.” +
Related Stories
| Oct 5, 2012
2012 Reconstruction Award Bronze Winner: Pomeroy Senior Apartments, Chicago, Ill.
The entire interior of the building was renovated, from the first floor lobby and common areas, to the rooftop spaces. The number of living units was reduced from 120 to 104 to allow for more space per unit and comply with current accessibility requirements.
| Oct 5, 2012
2012 Reconstruction Award Bronze Winner: Walsh Group Training and Conference Center, Chicago, Ill.
With its Building Team partners—architect Solomon Cordwell Buenz, structural engineer CS Associates, and M/E engineer McGuire Engineers—Walsh Construction, acting as its own contractor, turned the former automobile showroom and paperboard package facility into a 93,000-sf showcase of sustainable design and construction.
| Oct 5, 2012
2012 Reconstruction Award Silver Winner: 220 Water Street, Brooklyn, N.Y.
The recent rehabilitation of 220 Water Street transforms it from a vacant manufacturing facility to a 134-unit luxury apartment building in Brooklyn’s DUMBO neighborhood.
| Oct 5, 2012
2012 Reconstruction Award Silver Winner: Residences at the John Marshall, Richmond, Va.
In April 2010, the Building Team of Rule Joy Trammell + Rubio, Stanley D. Lindsey & Associates, Leppard Johnson & Associates, and Choate Interior Construction restored the 16-story, 310,537-sf building into the Residences at the John Marshall, a new mixed-use facility offering apartments, street-level retail, a catering kitchen, and two restored ballrooms.
| Oct 4, 2012
2012 Reconstruction Awards Silver Winner: Allen Theatre at PlayhouseSquare, Cleveland, Ohio
The $30 million project resulted in three new theatres in the existing 81,500-sf space and a 44,000-sf contiguous addition: the Allen Theatre, the Second Stage, and the Helen Rosenfeld Lewis Bialosky Lab Theatre.
| Oct 4, 2012
2012 Reconstruction Awards Gold Winner: Wake Forest Biotech Place, Winston-Salem, N.C.
Reconstruction centered on Building 91.1, a historic (1937) five-story former machine shop, with its distinctive façade of glass blocks, many of which were damaged. The Building Team repointed, relocated, or replaced 65,869 glass blocks.
| Oct 4, 2012
2012 Reconstruction Awards Gold Winner: Rice Fergus Miller Office & Studio, Bremerton, Wash.
Rice Fergus Miller bought a vacant and derelict Sears Auto and converted the 30,000 gsf space into the most energy-efficient commercial building in the Pacific Northwest on a construction budget of around $100/sf.
| Oct 4, 2012
2012 Reconstruction Award Platinum Winner: Building 1500, Naval Air Station Pensacola Pensacola, Fla.
The Building Team, led by local firms Caldwell Associates Architects and Greenhut Construction, had to tackle several difficult problems to make the historic building meet current Defense Department standards having to do with anti-terrorism, force protection, blast-proofing, and progressive collapse.
| Oct 4, 2012
2012 Reconstruction Awards Platinum Winner: City Hall, New York, N.Y.
New York's City Hall last received a major renovation nearly a century ago. Four years ago, a Building Team led by construction manager Hill International took on the monumental task of restoring City Hall for another couple of hundred years of active service.
| Oct 4, 2012
BD+C's 29th Annual Reconstruction Awards
Presenting 11 projects that represent the best efforts of distinguished Building Teams in historic preservation, adaptive reuse, and renovation and addition projects.