ixed messages are being issued on projections for the non-residential construction market in 2008. The Boston Globe printed an article in November 2007, “Dim outlook for NE economy throughout 2008”. FMI Corp a Raleigh, NC construction management consulting firm forecast that NE nonresidential construction will rise 5.2 percent in 2008. Portland Cement Association (PCA) and McGraw-Hill Construction projects, declines in all segments of construction, but does not predict a recession.
So how do we proceed in 2008? While there are significant factors that will impact our decisions in 2008 such as elections, evolving global demand for materials and a transitioning labor pool – the single greatest factor is the consumer confidence levels. Smart contractors will quickly adjust expectations for the next two years and manage their business accordingly. We cannot expect to achieve the same year-over year growth that many have enjoyed over the last several years. General and trade contractors need to streamline staff levels and carefully monitor reinvestments in new equipment.
The decision must be made between bidding on work to keep crews productive, often reducing profit margins just to obtain work, or cutting overhead and staff. Bidding on projects that don’t cover costs provides no benefit to a company and depresses the industry as a whole. Ultimately, cost stability will be achieved, but only when contractors bid projects responsibly.
Owners and project managers will need to increase their scrutiny of contractors as market dynamics change. Some contractors and trade contractors now entering the commercial market from the strangled residential market, while having applicable skill sets are not accustomed to the requirements of commercial work. Low price doesn’t always equal best value. Owners should consider a contractors years of experience in commercial work not just construction.
If we can get our government to invest in our countries future, as was successfully done by our government leaders many years ago, and fund the work for our infrastructures decaying bridges and roads we could quickly provide good jobs for many of our citizens. Not only the so called blue collar jobs would be created but other professions such as Engineers, Architects would see a direct increase in their employment prospects. Let’s stop the slide into recession and bring back the sounds and jobs of Americans’ building America.
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Does Building "Green" Attract More Green?
We are all most likely quite aware of the buzz attached to building "green," and the many associated ecological and quality-of-life issues.
But might there be additional, more tangible benefits?
A recent Wall Street Journal article [“Green-Technology Investments Rise”] reported that venture investors globally invested $3 billion in 221 companies that were developing so called clean ("green") technologies – from solar panels to electric cars. That was up a whopping 43% from the amount invested in 2006!
The majority of these investments were made in the United States, with solar companies representing the most popular green investment.
The largest U.S. investment went to Project Better Place, a Palo Alto, California-based organization that is developing new infrastructure to support electric cars.
The combination of increased investment and ongoing regulatory actions geared towards reducing greenhouse-gas emissions and promoting a heightened consciousness of the importance of energy conservation might be good indicators for the construction field to heed – building green may, in fact, attract more “green” in the long run!
