Bright spots in the homebuilding industry are being embraced like a long-lost family pet by builders slogging through the seemingly endless recession. First cause for optimism is a resurgence in the 55-plus market, described as “the buzz of the show,” at a recent National Association of Home Builders (NAHB) event. Secondly, demand for multifamily housing is keeping many firms busy in anticipation of demand far outweighing supply in the next few years. And, the so-called Gen Y — some 80 million children of baby boomers — soon will flood both apartments and single-family homes, giving builders further hope for the
The U.S. Dept. of Transportation is making headway in moving "TIGER" grants awarded early last year closer to actual construction. U.S. DOT announced on Dec. 29 that it had signed agreements with the Alabama and Tennessee DOTs on a $105-million Transportation Investment Generating Economic Recovery grant for two intermodal freight facilities along the Norfolk Southern Corp.'s "Crescent Corridor". DOT release. Of the $105-million grant, half will go to Alabama to help finance a $97.5-million, 261-acre regional facility near McCalla, about 20 miles southwest of Birmingham. Norfolk Southern (NS) and other sources will fund the remainder of the project's total cost.
+ Image Construction’s December unemployment rate rose to 20.7% from November’s 18.8%, according to the U.S. Bureau of Labor Statistics. Construction’s unemployment rate averaged 20.6% for all 2010, which was above 2009’s 19.0% rate and 2008’s 10.6% rate. A worrisome sign is that the industry lost a further 16,000 jobs in December. That measurement is seasonally adjusted; therefore, the downturn, with nearly all construction sectors showing job losses for the month, cannot be attributed to the industry’s usual fall and winter slowdown. Economists worry about the employment impact of the waning federal construction funding from the 2009 stimulus act, which
The recession has put downward pressure on costs, but the steepest declines have been recorded in western states, according to Phoenix-based cost consultant Rider Levett Bucknall (RLB), which compiles cost indexes for 13 cities nationwide. The steepest decline recorded by RLB was for Seattle construction costs, which have fallen 5% during the five quarters between the end of 2009 and the end of 2010. During the same period, the RLB cost index declined 3.6% in Phoenix, 1.5% in Portland, Ore., and 1.2% in Las Vegas. Declines have been moderating. In 2010’s fourth quarter, cost slipped in four western cities as
Slide Show New construction starts fell 9% in November from the previous month, according to McGraw-Hill Construction’s seasonally adjusted data. Non-residential building markets weakened for the second consecutive month, while non-building work retreated from last October’s gains. “The pullback in November shows that the up-and-down pattern continues, and there’s yet to be evidence that renewed expansion is taking hold,” says Robert Murray, MHC chief economist. “The worst of the decline for the commercial structure types is over, but activity remains very weak.” The educational sector of the nonresidential building market plunged 23% in November, despite the addition of a $500-million
The number of industry acquisitions in 2010 rose 5% as of Dec. 23, according to a year-end report by Morrissey-Goodale, a management consulting and research firm in Newton, Mass. It reports a total of 242 deals, up from 229 during the same time in 2009. Company principal Mick Morrissey says the upward trend will continue in 2011, driven in part by newly enacted tax-law changes. But he adds, “Shifts in how owners purchase services, how owners allocate risks and a lack of demand for stock in privately held firms will be the bigger drivers.” Among the firms announcing acquisitions on
Global engineering and construction firms are optimistic about market and bottom line improvements in 2011, but they are being realistic about remaining obstacles in the way of profitable growth, says the latest annual survey of 140 CEOs and other top executives by Swiss-based financial and business consultant KPMG International. + Image + Image The survey, titled “Adapting to an Uncertain Environment” and released late last year, reports that nearly half the respondents say company backlogs will rise next year—driven by either pent-up owner and consumer demand, expansion into new market sectors such as power or moves into new geographies such
The global recession’s vise grip on construction costs is starting to loesen in several countries, according to the London-based international project and cost-management firm Gardiner & Theobald Inc. The nineteenth annual survey of costs is conducted exclusively for Engineering News-Record. G&T surveys its 51 offices and affiliates worldwide. Related Links: Forecast: A Weak Recovery Checks Inflation Confidence Index: Heads of Major Firms Believe Market Is Nearing Stability Equipment: Why Few Are Debating the New Federal Fuel Economy Rules Lumber: Chinese Demand Props Up Prices Asia: Overseas, Inflation Creeps Back Complete Report Of the 28 countries reporting building cost inflation through
The tax breaks that fill the $858-billion Middle Class Tax Relief Act will provide welcome benefits for construction workers, some small firms, family-owned businesses and companies mulling equipment purchases. But the key question for the still-struggling construction industry is whether the measure’s incentives, including an extension of 2001 and 2003 tax-rate reductions, will hoist the economy enough to get more projects under way. If that “trickle up” effect does come to pass, it could give construction markets a boost, but probably not a sharp spike and probably not right away. Photo: Ap Images/J. Scott Applewhite Nevertheless, industry economists and financial
No more federal stimulus money, no highway bill, a weak economic recovery, a stalled housing market, a nonresidential building market yet to bottom out, gridlock in government, continued high unemployment—it could add up to no inflation in 2011. That is about as simple as a cost forecast can be. Inflation? Not so much. Engineering News-Record expects its Building Cost Index to increase just 1.3% next year after rising 3.6% in a difficult 2010 market. ENR projects its Construction Cost Index to increase 2.0% in 2011 following this year’s 3.6% gain. Related Links: Confidence Index: Heads of Major Firms Believe Market
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