Construction consultant FMI‘s first-quarter 2012 Construction Outlook Report shows a 5 percent increase over 2011 for total construction put in place, or $826.3 billion.
According to the report, in order for residential construction to achieve the 8 percent increase projected and top $264.4 billion in 2012, a number of factors still have to fall into place, including a reduction in the current inventory of homes, lenders willing to lend on reasonable terms and a steady improvement in hiring.
For nonresidential construction, FMI projects a 4 percent increase in nonresidential buildings for 2012, topping $341 billion, with slightly higher growth in 2013 to $361 billion. Nonresidential contractors are facing many of the same problems as residential contractors, says FMI. In addition, competition is fierce, with low price still the name of the game. Project owners who are ready to restart their building programs are expecting hungry contractors to submit very low bids. One of the keys for growth will be the return of private investment in construction. Additionally, federal, state and local government construction have been dialed back until budgets are in better repair and tax revenues return to levels that are more normal. Research indicates that there are signs this is starting to happen.