Construction Forecast to Grow 5.8 Percent in 2008
Construction put in place is expected to grow by 5.8 percent next year, despite a decline of 3.7 percent in 2007, according to a new report.
The report, 2008 U.S. Construction Overview, forecasts that in 2008, construction put in place will total $1.21 trillion, about 9 percent gross of domestic product. That means that 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.
“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,” says Heather Jones, construction economist for FMI’s Research Services, which conducted the report. "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 transporation segments will see the strongest growth in 2008.”
In addition, the 2008 Overview discusses standout trends in the construction industry, such as:
Green, nonresidential construction put in place was $13.4 billion in 2006. By 2008, the report forecasts $21.2 billion of all new nonresidential construction will employ the use of green-building principles—a 58 percent increase. According to FMI, the sizable growth in green construction has created a shift in perception among owners and the architectural and engineering communities over the last few years—the industry is increasingly recognizing green building capabilities as a necessary part of a firm’s best practices.
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.
Dramatic ownership turnover within the construction industry will bring significant change and challenge over the next decade. Family ownership is declining while broad-based employee ownership is increasing.
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.