Retail, office buildings the best bet

Retail and office fare best in commercial construction decline through 2010.

10/15/2009


 

According to a report by Reed Construction Data , most of the decline in construction spending in this building cycle has already occurred for commercial buildings. A 4% to 5% further decline is expected from August through next winter. The decline is expected to be less for retail and more for hotels. An expected resumed rise in project cost at year-end, mostly for materials, will halt the decline in nonresidential construction spending in current dollars in about six months but the decline will extend into the summer measured inflation adjusted dollars. There will not be a significant increase in construction activity until late next year.

The recession began early in the retail market. Peak spending in this cycle was August 2007. The 40% drop since then has been across all retail sectors but especially deep for retailers with very income elastic products. This includes restaurants, auto dealers, and the retailers that typically locate in the larger shopping malls. By contrast, retail construction spending has held up much better for retailers with relatively income inelastic products. This includes big box discounters and the retailers that typically locate in the smaller neighborhood shopping centers.



No comments
Consulting-Specifying Engineer's Product of the Year (POY) contest is the premier award for new products in the HVAC, fire, electrical, and...
Consulting-Specifying Engineer magazine is dedicated to encouraging and recognizing the most talented young individuals...
The MEP Giants program lists the top mechanical, electrical, plumbing, and fire protection engineering firms in the United States.
Water use efficiency: Diminishing water quality, escalating costs; Lowering building energy use; Power for fire pumps
Building envelope and integration; Manufacturing industrial Q&A; NFPA 99; Testing fire systems
Labs and research facilities: Q&A with the experts; Water heating systems; Smart building integration; 40 Under 40 winners
Maintaining low data center PUE; Using eco mode in UPS systems; Commissioning electrical and power systems; Exploring dc power distribution alternatives
Protecting standby generators for mission critical facilities; Selecting energy-efficient transformers; Integrating power monitoring systems; Mitigating harmonics in electrical systems
Commissioning electrical systems in mission critical facilities; Anticipating the Smart Grid; Mitigating arc flash hazards in medium-voltage switchgear; Comparing generator sizing software
As brand protection manager for Eaton’s Electrical Sector, Tom Grace oversees counterfeit awareness...
Amara Rozgus is chief editor and content manager of Consulting-Specifier Engineer magazine.
IEEE power industry experts bring their combined experience in the electrical power industry...
Michael Heinsdorf, P.E., LEED AP, CDT is an Engineering Specification Writer at ARCOM MasterSpec.