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

Carbon management platform offers free carbon emissions assessment for NYC buildings - Image by igormattio from Pixabay
Sustainability | Aug 15, 2023

Carbon management platform offers free carbon emissions assessment for NYC buildings

nZero, developer of a real-time carbon accounting and management platform, is offering free carbon emissions assessments for buildings in New York City. The offer is intended to help building owners prepare for the city’s upcoming Local Law 97 reporting requirements and compliance. This law will soon assess monetary fines for buildings with emissions that are in non-compliance.

Amount of office space in U.S. is declining for the first time, says JLL Image by louisehoffmann83 from Pixabay
Office Buildings | Aug 15, 2023

Amount of office space in U.S. is declining for the first time, says JLL

In what is likely a historic first, the amount of office space in the U.S. is forecast to decline in 2023, according to Jones Lang LaSalle. This would be the first net decline according to data going back to 2000, JLL says, and it’s likely the first decline ever.

Image by Q K from Pixabay
Fire-Rated Products | Aug 14, 2023

Free download: Fire-rated glazing 101 technical guide from the National Glass Association

The National Glass Association (NGA) is pleased to announce the publication of a new technical resource, Fire-Rated Glazing 101. This five-page document addresses how to incorporate fire-rated glazing systems in a manner that not only provides protection to building occupants from fire, but also considers other design goals, such as daylight, privacy and security.

Lobby interior desk minimalist
Office Buildings | Aug 14, 2023

The programmatic evolution of the lobby

Ian Reves, Managing Director for IA's Atlanta studio, shares how design can shape a lobby into an office mainstay.

Fast-tracking construction projects offers both risk and reward
Contractors | Aug 14, 2023

Fast-tracking construction projects offers both risk and reward

Understanding both the rewards and risk of fast-tracking a project can help owners, architects, engineers, and contractors maximize the benefits of this strategy and can bring great reward on all fronts when managed properly.

Atlanta’s Old Fourth Ward gets a 21-story, 162-unit multifamily residential building
MFPRO+ New Projects | Aug 10, 2023

Atlanta’s Old Fourth Ward gets a 21-story, 162-unit multifamily residential building

East of downtown Atlanta, a new residential building called Signal House will provide the city with 162 units ranging from one to three bedrooms. Located on the Atlanta BeltLine, a former railway corridor, the 21-story building is part of the latest phase of Ponce City Market, a onetime Sears building and now a mixed-use complex.

Bjarke Ingels Group and Skanska to deliver 1550 on the Green, one of the most sustainable buildings in Texas
Office Buildings | Aug 10, 2023

Bjarke Ingels Group and Skanska to deliver 1550 on the Green, one of the most sustainable buildings in Texas

In downtown Houston, Skanska USA’s 1550 on the Green, a 28-story, 375,000-sf office tower, aims to be one of Texas’ most sustainable buildings. The $225 million project has deployed various sustainable building materials, such as less carbon-intensive cement, to target 60% reduced embodied carbon.

The main lobby of the Regions Inpatient Mental Health Center third floor features intentional design elements
Healthcare Facilities | Aug 10, 2023

The present and future of crisis mental health design

BWBR principal Melanie Baumhover sat down with the firm’s behavioral and mental health designers to talk about how intentional design can play a role in combatting the crisis.

Reeja Shrestha, a second-year student pursuing a combined bachelor’s and master’s degree in architecture and design at Howard University, has been selected as the first recipient of the Hoffmann Diversity Advancement Scholarship.
Architects | Aug 10, 2023

Hoffmann Architects + Engineers awards first Diversity Advancement Scholarship to Reeja Shrestha of Howard University

Now in its inaugural year, the Hoffmann Scholarship was established in collaboration with the Connecticut Architecture Foundation (CAF) to support students from underrepresented racial or ethnic groups who are seeking degrees in architecture or engineering. 

Anthology of King of Prussia
Senior Living Design | Aug 7, 2023

Putting 9 senior living market trends into perspective

Brad Perkins, FAIA, a veteran of more than four decades in the planning and design of senior living communities, looks at where the market is heading in the immediate future. 

boombox1
boombox2

Top Articles

native1

More In Category

Urban Planning

Bridging the gap: How early architect involvement can revolutionize a city’s capital improvement plans

Capital Improvement Plans (CIPs) typically span three to five years and outline future city projects and their costs. While they set the stage, the design and construction of these projects often extend beyond the CIP window, leading to a disconnect between the initial budget and evolving project scope. This can result in financial shortfalls, forcing cities to cut back on critical project features.

Libraries

Reasons to reinvent the Midcentury academic library

DLR Group's Interior Design Leader Gretchen Holy, Assoc. IIDA, shares the idea that a designer's responsibility to embrace a library’s history, respect its past, and create an environment that will serve student populations for the next 100 years.

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