Raleigh, N.C.-based FMI, management consultants and investment bankers to the construction industry, last week published the 2008 U.S. Construction Overview.
Published annually, FMI’s report offers a comprehensive look at vital construction trends. It also forecasts the growth or decline in each market segment and geographic region, noting both short-term and long-term considerations.
This year’s Overview forecasts a 5.8-percent growth of construction put in place for the coming year, although it was down 3.7 percent in 2007.
The health and direction of the construction market matters not only to firms directly in the construction industry, but also to the overall economic health of the country. In 2008, construction put in place will total $1.21 trillion, about 9 percent gross of domestic product.
In addition, the 2008 Overview discusses standout trends in the construction industry, such as:
Green Building. Green, nonresidential construction put in place was $13.4 billion in 2006. By 2008, FMI projects $21.2 billion of all new nonresidential construction will employ the use of green-building principles — a 58-percent increase.
Employee Ownership. Dramatic ownership turnover within the construction industry will bring significant change and challenge over the next decade, FMI predicts. Family ownership is declining while broad-based employee ownership is increasing.
Productivity Improvement. Productivity improvement is approaching safety in importance for self-performers. Firms have begun to identify productivity as a critical strategic issue to provide sustained return on investment as well as an opportunity to gain competitive advantage. Using planning tools and job cost systems to manage projects are just some of the ways contractors can focus on productivity.
Hispanic Workforce. Of the 11.8 million workers in the construction industry work force in 2006, 2.9 million were Hispanic — 25 percent of the total. This trend has not slowed, despite the housing market slowdown and increasingly stringent immigration rules. Many construction employers recognize that language barriers seriously affect job site communication and productivity, as well as adherence to and understanding of safety regulations. More Hispanics are injured and killed on construction sites today than any other ethnic or racial group.
“The 2008 construction forecast is generally positive and many sectors of the construction industry will remain healthy, despite the continuing drag of the housing downturn,” said Heather Jones, construction economist for FMI’s Research Services. "In terms of trends, the aging of the population, immigration and deteriorating infrastructure will drive much of this growth. The health care, public safety, office and transportation segments will see the strongest growth in 2008.”
FMI has published the Overview since 1977. The publication surveys, analyzes and summarizes trends in the building and construction industry and provides all sectors of the construction industry with an overall picture of factors influencing construction spending in the various sectors for the upcoming 18 months.
FMI delivers innovative solutions to contractors, engineers, architects, environmental firms, manufacturers of construction equipment, construction materials producers and distributors, private owners, government agencies, utility companies, surety companies and trade associations. For more information, visit www.fminet.com.