More rough waters lie ahead for the worldwide construction industry, according to IHS Global Insight Construction Service, Lexington Mass., which predicts further decreases in construction spending. According to first-quarter data from 69 markets, IHS predicted construction spending would remain flat in 2010. However, Laura Hanlon, the research firm’s product manager, admits that, in light of recent economic turmoil, the first-quarter outlook was a little overly optimistic. “As of quarter one, we were still optimistic for a flat 2010,” said Hanlon. “However, we just released a new forecast [on June 30], and with the information we have received through quarter two,
In May, the dollar value of total construction starts rose 3%, according to McGraw-Hill Construction’s latest report on construction activity. Soruce: McGraw-Hill Construction Analytics. ConstructionContract Value Cumulative Year-to-Date Through May 2010 Three percent may not be a remarkable number, but it is notable that most of the gain came in the previously moribund non-residential building market. The sector rose 19% from the previous month but is now down 16% from the five-month cumulative total of last year. Those percentages are an improvement over the 18% year-to-year decline recorded during the previous month. “The good news with May statistics is that
After more than two years in the doldrums, design firms are starting to hear the rumblings of a recovery, but it could be many months before talk turns into action. With private developers still severely hampered by the credit crunch and many public entities facing budget shortfalls, the funding stream for projects remains a trickle. Photo: HDR While there are fewer hospital megaprojects being built, some continue, such as this $1.27-billion replacement hospital for the Parkland Health & Hospital System in Dallas. Related Links: View More on Top 500 Sourcebook 2010 View Complete Top 500 Sourcebook 2010 with Data and
President Obama has signed legislation that aims to help pension plans cope with losses they sustained when financial markets tumbled in 2008 and 2009. Lawmakers removed the pension provisions from a package of tax-break extensions and attached them to a measure that temporarily cancels a looming cut in Medicare payments to physicians. The Medicare-pensions measure gained final congressional approval when the House passed it on June 24. Obama signed the bill the following day. The measure has relief for single-employer and multi-employer, defined-benefit plans. For multi-employer plans, which affect unionized workers and employers in construction and certain other industries, enactment
Senate Republicans--and one Democrat--again have blocked a package of extensions of tax incentives, including some that construction industry groups support. Democrats' failure to win a procedural vote on June 24 sends the drafters of the bill back to the drawing board. The 57-41 vote to cut off debate on the tax "extenders" bill was three votes short of the 60 that Democrats needed. Democrat Ben Nelson of Nebraska joined 40 Republicans who voted "no." It is the third time that an extenders package has been sidetracked on the Senate floor in recent weeks. The latest vote left the fate of
The recession is expected to keep its grip on costs through the second half of this year, despite a shift in what is affected. Construction costs heavily influenced by residential construction have already bounced up from historic lows, but that may be coming to an end, along with the expiration of federal tax credits for first-time homeowners. Costs associated with the nonresidential building markets have bottomed out. But while there is not much room for further declines, there is also very little upward pressure from either the labor or materials markets on the nonresidential building cost indexes. Image Related Links:
A mid high unemployment and a credit freeze that has delayed or eliminated construction plans, a dip in cement consumption drove down prices during the first half of 2010. Cement prices have fallen in six of the last seven months, including relatively large monthly declines of 1.5% in April and 1.4% in May, according to the Bureau of Labor Statistics’ producer price index. Related Links: ECONOMICS: With Stimulus Spending Running Out Recession Will Keep Grip on Costs CONFIDENCE SURVEY: Industry Firms Begin To Believe The Worst May Soon Be Over COMPENSATION: Recession Squeezes Salaries HIGHWAYS: Soaring Asphalt and Fuel Prices
The recession everyone hoped would end quickly has now lasted for two years, at first causing fear and concern that now has turned to grit and determination to hold on until better times. While no one sees the current market as ready to take off, major firms are beginning to think the market may soon hit bottom and slowly begin to pull itself back from the brink in 2011. Image Related Links: ECONOMICS: With Stimulus Spending Running Out Recession Will Keep Grip on Costs COMPENSATION: Recession Squeezes Salaries CEMENT: Weak Demand Undercuts Prices HIGHWAYS: Soaring Asphalt and Fuel Prices Spike
Associated Builders and Contractors members are lobbying Congress to stimulate construction, not with stimulus funds but by pushing financial regulators and banks to restore lending to private-sector projects and firms. To push jobs, the open-shop construction group calls for unfreezing project lending for more access to capital, examining federal guidelines on write-downs and curtailing financial institutions from “unnecessarily restricting, reducing or calling in lines of credit” to contractors and suppliers. “Freeing up credit is how to create a real economy,” said James W. Elmer, president of the Spokane, Wash.-based construction firm that bears his name and ABC’s chairman. Also speaking
With revenue continuing to be a significant struggle for many contractors, salaries for construction staff are languishing at levels not seen in decades. Salary increases fell from 4.1% in 2008 to 3% in 2009 among companies that offered raises, and contractors estimate they could dip to 2.9% in 2010, according to a recent survey by PAS Inc., a construction-compensation consulting firm in Saline, Mich. Related Links: ECONOMICS: With Stimulus Spending Running Out Recession Will Keep Grip on Costs CONFIDENCE SURVEY: Industry Firms Begin To Believe The Worst May Soon Be Over CEMENT: Weak Demand Undercuts Prices HIGHWAYS: Soaring Asphalt and
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