Q2 2012 construction outlook report
FMI's forecast predicts 3% growth by the end of 2012 and 7% in 2013 in spite of economic uncertainty in Europe and partisan politics in the U.S.
FMI's second quarter 2012 Construction Outlook Report forecast calls for 3% growth for construction put in place (CPIP) by the end of 2012 and another 7% in 2013 for a total of $882.4 billion. This is $92.6 billion more than the lows of 2011.
Despite the constant confusion of news from Europe and uncertainty and inaction in the U.S. Congress, there are some positive signs in the economy. As one might expect, improving housing construction is helping to lead the way, especially multi-family housing. However, power construction is another strong point, and even commercial construction will show signs of rising from its slumber. Nonetheless, slow growth may be even more challenging than large market drops or boom times, because it requires improved management, precision market research and creative business development.
Residential Construction is coming back lead by 32% growth in multi-family housing.
In Nonresidential Construction the forecast is mixed with healthcare and manufacturing showing the most positive signs of growth.
- Lodging CPIP is expected to grow 4% and rebound somewhat to 7% and 8% in 2013 and 2014.
- Office construction should be 4% by the end of 2012 and improve to around 6% for 2013 through 2014.
- Commercial construction is beginning to grow again. FMI expects 5% growth in CPIP this year, followed by 8% growth in 2013 to around $49 billion.
- Healthcare construction is expected to only rise 3% in 2012, that will strengthen to double digits by 2015, achieving record highs around $52.6 billion.
- Education construction will have only a 1% increase in CPIP in 2012 and a slight rise of 2% in 2013.
- Religious construction will be flat in 2012, with some revival in 2013 to 6% growth at $4.3 billion.
- Public safety construction will be flat in 2012, but will the grow 6% in 2013 to $4.3 billion.
- Amusement and recreation construction will climb 8% to $17.4 billion in 2013.
- Transportation construction will grow 3% in 2012 and to 5% through 2015.
- Communications construction will experience steady growth of 4% to 6% through 2015 with 2012 ending up around $18.5 billion.
- Manufacturing construction is expected to rise 3% in 2012 and show steady increases to 2015.
- Power-related construction is forecasted to have a 10% rise for 2012 and another 10% in 2013 to $108 billion.
- Highway CPIP will drop 2% in 2012 and grow just 1% in 2013 to reach $77.7 billion or back near 2007 levels.
- Sewage and waste disposal CPIP is expected to be around $23.9 billion.
- Water supply is beginning to grow, but will gain only 2% in 2012 and 3% in 2013 to reach $14.7 billion.
- Conservation and development growth is expected at 2% in 2012 and demonstrate slow, steady progress through 2015.
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Annual Salary Survey
In a year when manufacturing continued to lead the economic rebound, it makes sense that plant manager bonuses rebounded. Plant Engineering’s annual Salary Survey shows both wages and bonuses rose in 2012 after a retreat the year before.
Average salary across all job titles for plant floor management rose 3.5% to $95,446, and bonus compensation jumped to $15,162, a 4.2% increase from the 2010 level and double the 2011 total, which showed a sharp drop in bonus.