Construction Outlook 2012

The 2012 Construction Outlook May Require Desert Survival Techniques

By: Doug Storer
January 23, 2012

Construction will remain a challenging environment for 2012 much like a desert. Under the scorching sun and arid sands the desert environment may appear to be devoid of life. Surprisingly a large number of animals not only survive in the desert, but actually thrive. What can the construction industry learn from animals that survive in the desert? Analysts say the sector will eventually rebound, but for now that prospect seems like a desert mirage in the distance.

“The long-suffering construction sector still has another five quarters of job losses before it too joins in the labor market’s recovery,” University of Central Florida economists predict. “Job growth will not return to the construction sector until the second quarter of 2013.”

So what survival techniques can we learn from desert dwellers until the rains return? Desert animals such as rabbits and prairie dogs make use of water holes and plants and conserve it for long periods of time. Snakes and lizards control their body temperature by gaining or losing heat from their surroundings which requires less food. The construction industry has for the last three years adapted to its environment by incorporating more efficient operating structures, utilizing new technologies like Building Information Modeling (BIM) and becoming more in tune with our environment through sustainable “green” building materials and techniques.

“We think the overall economy will grow a little bit more rapidly in 2012,” said Mark Vitner, a senior economist with Wells Fargo. “But it’s not going to be typical of what we were accustomed to in Florida.” Here is a glimpse at what to expect in 2012:

Education construction put in place was down 13% in 2010, so a reduction of only 2% for 2011 and a forecast of 4% growth for 2012 is welcome. 2012 trends include:

  • Greener schools or renovating existing schools for improved energy use.
  • Increased use of prefabricated/modular school construction.
  • Rise in distance learning or online courses.

Manufacturing sector has been one of the hardest-hit in the recession with a 33% drop in 2010 and another 6% expected in 2011 compounded with a 2% loss in 2012 to just $35.8 billion. U.S. manufacturing has lost more than five million jobs, nearly 33%, in the last decade. 2012 Manufacturing trends will include:

    • Capacity utilization is on the rise, but still only 75.5%.
    • Automotive industry in slow recovery, but expects to increase capital projects in 2012.
    • Incentives to “repatriate” manufacturing in the U.S. from offshore

Religious construction lost another 4% in 2011 and will continue to be weak in 2012 with $4.25 billion expected in CPIP. Religious construction trends include:

  • Lending environment continues to be a challenge for many congregations.
  • Improved space utilization and additions are taking the forefront, as new construction is increasingly not an option.
  • Churches are becoming smarter about attracting parishioners who are drawn in by facilities and the church building itself.
  • Energy efficiency, green sustainability and long-lasting quality are becoming top features many congregations want in worship houses.

One Response to The 2012 Construction Outlook May Require Desert Survival Techniques

  1. Gary W. Dillman, Jr. says:

    Enjoyed the article! Tks, for taking time to do your newsletter, it is always welcomed.

    God Bless,

    Gary Dillman
    CEO/Baylor Plastering & Drywall, Inc.

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