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FMI Q1-2012 Construction Outlook Report

RALEIGH, N.C. – FMI (www.fminet.com), the largest provider of management consulting and investment banking to the engineering and construction industry, releases the first-quarter, 2012 Construction Outlook Report. FMI's forecast for total construction put in place in 2012 is a 5 percent increase compared to 2011, or $826.3 billion. The last time construction put in place was at this level was 2000-2001.

Economic Indicators:
Despite slow growth projections and rising gasoline prices, the GDP is still growing and consumers are still spending, reflected in the Conference Board's Consumer Confidence Index® increasing to 70.8 in February compared to 70.4 a year ago. Along with the Federal Reserve's intervention, these factors have served to keep growth slow and inflation in check.

Residential Construction:
In order for residential construction to achieve the 8 percent increase projected and top $264.4 billion in 2012, a number of factors still have to fall into place:

    Reduction in the current inventory of homes
    Lenders willing to lend on reasonable terms
    Steady improvement in hiring

Nonresidential Construction:
Projections indicate a 4 percent increase in nonresidential buildings for 2012, topping $341 billion, with slightly higher growth in 2013 to $361 billion. Nonresidential contractors are facing many of the same problems as residential contractors. In addition, competition is fierce, with low price still the name of the game. Project owners who are ready to restart their building programs are expecting hungry contractors to submit very low bids. One of the keys for growth will be the return of private investment in construction. Additionally, federal, state and local government construction have been dialed back until budgets are in better repair and tax revenues return to levels that are more normal. Research indicates that there are signs this is starting to happen.

To download a copy of the full report, click here. For reprint permission or to schedule an interview with the author, please contact Sarah Avallone at 919.785.9221 or savallone@fminet.com.

About FMI:
FMI is the largest provider of management consulting, investment banking and research to the engineering and construction industry. We work in all segments of the industry providing clients with value-added business solutions, including:

    Strategy Development
    Market Research and Business Development
    Leadership and Talent Development
    Project and Process Improvement
    Mergers, Acquisitions and Financial Consulting
    Compensation Data and Consulting

Founded by Dr. Emol A. Fails in 1953, FMI has professionals in offices across the U.S. FMI delivers innovative, customized solutions to contractors; construction materials producers; manufacturers and suppliers of building materials and equipment; owners and developers; engineers and architects; utilities; and construction industry trade associations. FMI is an advisor you can count on to build and maintain a successful business, from your leadership to your site managers. For more information, visit www.fminet.com.

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