December 14, 2010
What Will 2011 Bring for the Construction Industry?
With the New Year fast approaching, it has been interesting to compare all of the recently published forecasts on the nation’s construction industry. As a fairly optimistic person, I must admit I’ve been continually pessimistic about the prospects for an economic recovery for our industry. Construction has lagged through this recovery, yet as I’ve researched many signs are now pointing to a positive future.
McGraw-Hill Construction (MHC) recently released its 2011 Construction Outlook predicting an increase in overall U.S. construction starts for next year. According to Robert Murray, Vice President of Economic Affairs at MHC, the level of construction starts in 2011 is expected to advance 8 percent to $445.5 billion, following the 2 percent decline predicted for 2010. “While the economy is still facing headwinds, the stage is being set for construction to see modest improvement in 2011 from this year’s very weak activity,” Murray said. “We’re turning the corner, slowly. 2011 will be the first year of renewed growth for overall construction activity, and 2010 becomes the final year of a very lengthy and unusual construction cycle.”
Other forecasts, like the one recently released by the Associated Builders & Contractors (ABC), are taking a more modest approach. “The good news for 2011 is the period of deep decline in U.S. nonresidential construction spending is over; however this means the industry will remain stagnant, with overall construction volumes mired at or near bottom-of-the-cycle levels,” ABC said. That means 2011 construction spending is positioned to be nearly a quarter less than 2008 totals.
In addition to these forecasts, construction industry experts have delivered forecasts for green building, residential building, building product manufacturers, building materials, technology and the economy as a whole, shedding light on these crucial sectors.
Camilli Economics believes that the U.S. is in its second year of economic expansion. “While the growth rate is currently modest, momentum is likely to grow as the economy responds to ongoing monetary and fiscal stimulus in the pipeline,” said Kathleen Camilli, president. “Notwithstanding the financial crisis’ impact on residential and nonresidential construction, growth in this sector of the economy will continue to be driven by innovation in building technologies.”
Whatever the condition of the economy, it is predicted that technology will continue to advance. Green design and sustainable elements will continue to be integrated into new and existing construction sites. While it remains to be seen how quickly Building Information Modeling (BIM) will change our industry, the ability to integrate new technology is an expensive and endless challenge.
Furthermore, in spite of this challenging economy, companies must maintain one major principle: preserving a culture of pride, quality, and performance amongst their employees. While the struggles of 2010 are hard to see past, it’s important to not forget this is also the time to improve your organization and work to ensure its continued success. Without the help of your dedicated staff, your organization probably would not be what it is today.