This article (the one below entitled, “A Very Cold Winter for Construction”) appeared on the web-site of Associated General Contractors (AGC) on February 8, 2011. The author of the article predicts that “total construction” (this refers to total construction in the U.S.) will increase 3-7% in 2011 compared to 2009.
Prior to this, we’ve pointed out that the AIA ABI Index was positive news (the ABI Index was above 50) in three out of the last four months, indicating (supposedly) that Architects will be busier months from now, than they now are or have been in the recent past.
Given all the snow that many parts of the country have experienced, so far during Q1 2011, it is highly likely that revenues of reprographers, in parts of the U.S. that have been heavily and adversely affected by the heavy winter weather, will be challenged in Q1 2011, but, as we said in an earlier post this year, we do believe that, as the year progresses, there will be a “pick-up” in design and construction, leading to better revenues (than last year) for U.S. reprographers. Let’s hope that WILL be the case.
Here’s the article I found on the AGC’s web-site:
A Very Cold Winter for Construction
This isn’t a weather report but an economic one. On February 4, the Bureau of Labor Statistics reported that construction employment in January tumbled by 32,000 jobs. Some of that job loss may be attributable to projects that didn’t start during harsh midmonth weather conditions. But most of the decrease reflects the ongoing decline in construction activity, which has lasted for almost five years. The high points for construction employment and spending were in the spring of 2006. The January employment total was the lowest since 1996.
As for construction spending, the Census Bureau reported on February 1 that spending in December (2010) was at the lowest level since July 2000. For the (2010) year as a whole, spending was down more than 10 percent from 2009, the fourth yearly decrease in a row and the lowest annual total since 2000—even without adjusting for inflation.
Nevertheless, there are a few signs that a thaw is beginning. Several billion dollar-plus manufacturing projects have been announced, won permits or broken ground in recent weeks: a lubricating-oil plant in Mississippi, a steel plant in Louisiana, and a specialty steel plant. Market-rate multifamily rental projects have started up in a number of metro areas as vacancy rates edge down from recent highs and effective rents begin to rise. A variety of large hospital projects are underway or in fundraising phases. And warehouse and truck terminal construction should pick up as exports, imports and domestic sales keep rising.
Offsetting these positives will be the conclusion of many base realignment (BRAC) and stimulus projects. Funding for construction by all levels of government appears likely to hold level, at best, through most of 2011, and probably drop off sharply by yearend or early in 2012.
Expect total construction spending to increase between 3 and 7 percent in 2011 as a whole compared with 2010. That will be a welcome turnaround but will not even bring spending back to 2009 levels.