Construction to grow in 2008
FMI publishes its U.S. Construction Overview and predicts that green building, employee ownership, productivity improvement, and the Hispanic workforce will positively impact the 2008 construction industry.
FMI , Raleigh, N.C., forecasts a 5.8% growth of construction for 2008, despite results that the industry was down 3.7% in 2007.
FMI’s 2008 U.S. Construction Overview, published annually, gives a comprehensive report on construction trends. The report says that construction put in place will total $1.21 trillion in 2008, about 9% gross of domestic product, contributing to the overall economic health of the country.
In addition, the 2008 Overview discusses standout trends in the construction industry, such as:
Green building. Green, nonresidential construction put in place was $13.4 billion in 2006. By 2008, FMI projects $21.2 billion of all new nonresidential construction will employ the use of green-building principles—a 58% increase. This sizable growth in green construction has created a shift in perception among owners and the architectural and engineering communities over the past few years—the industry is increasingly recognizing green building capabilities as a necessary part of a firm’s best practices.
Employee ownership. Dramatic ownership turnover within the construction industry will bring significant change and challenge over the next decade. Family ownership is declining while broad-based employee ownership is increasing.
Productivity improvement. Productivity improvement is approaching safety in importance for self-performers. Firms have begun to identify productivity as a critical strategic issue to provide sustained return on investment as well as an opportunity to gain competitive advantage. Using planning tools and job cost systems to manage projects are just some of the ways contractors can focus on productivity.
Hispanic workforce. Of the 11.8 million workers in the construction industry work force in 2006, 2.9 million were Hispanic—25% of the total. This trend has not slowed, despite the housing market slowdown and increasingly stringent immigration rules. Many construction employers recognize that language barriers seriously affect job site communication and productivity, as well as adherence to and understanding of safety regulations. More Hispanics are injured and killed on construction sites today than any other ethnic or racial group.
The 2008 construction forecast is generally positive and many sectors of the construction industry will remain healthy, despite the continuing drag of the housing downturn,” said Heather Jones, construction economist for FMI’s Research Services. “In terms of trends, the aging of the population, immigration, and deteriorating infrastructure will drive much of this growth. The health care, public safety, office, and transportation segments will see the strongest growth in 2008.”