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Nonresidential Spending Predicted to Grow in 2019
August 10, 2018
Nonresidential construction spending is expected to take a step back in 2019 compared to 2018; however, overall nonresidential building is still predicted to grow. At the start of the year, economists from different firms polled by The American Institute of Architects (AIA), said views have changed for the better, according to the recently released consensus forecast from AIA.
“At the halfway point of the year, this panel is even more optimistic,” said AIA Chief Economist Kermit Baker, Hon. AIA, Ph.D. in the release. Overall nonresidential building was predicted to have a 4.7% growth in 2018 and a 4% growth in 2019. At the beginning of the year, it was projected that nonresidential spending would increase 4% this year and slightly under that next year.
Commercial/industrial is expected to have a large drop-off next year, coming in at 3.4% growth compared to nearly 7% this year. However, industrial growth is forecasted to increase 5% year-over-year. Meanwhile, the institutional sector is expected to remain the same at 4.5% growth. Public safety is forecasted to see a large drop in growth as well from 10.9% to 5.9%.
“If these projections materialize, by the end of next year the industry will have seen nine years of consecutive growth, and total spending on nonresidential buildings will be 5% greater—ignoring inflationary adjustments—than the last market peak of 2008,” added Baker.
-Michael Miller, managing editor
Construction CEOs Still Slow to Embrace Technology
August 8, 2018
A recent survey of CEOs by organization Vistage indicates many construction executives do not plan on expanding the use of technology in their companies. About half of the respondents do not plan on technology impacting their work in the next 12 months, citing the use of blockchain, artificial intelligence, connected devices and intelligent digital assistants.
Most of these feelings toward technology come from CEOs remaining optimistic about future jobs and the hiring of future employees. The respondents of the report also expressed confidence in the current economy, expecting it to remain healthy.
As a whole, the commercial construction industry has remained slow to adopt technological advances. The results of this survey continue to reflect this notion, coupled with the fact that construction labor and trade work continues to be unpopular with younger generations entering the workforce.
The use of technology on the job has proven to speed up the building process and save CEOs money, however this also does cut down on the number of hires and employees moving forward.
—Christie Citranglo, editorial associate
Construction Industry Booming With New Jobs
August 7, 2018
Unemployment in the construction industry reached an 18-year low in July when an addition of 19,000 net new jobs brought the sector’s unemployment rate down to 3.4%, half a percent lower than the national rate among all industries.
Last month’s surprising results come after 13,000 new jobs were created in June, now bringing new construction jobs to a total of 308,000 since July 2017, Associated Builders and Contractors (ABC) reported on Aug. 3. Nonresidential construction employment increased sixfold month-over-month (MoM) compared to residential; however, residential jobs nearly doubled nonresidential jobs year-over-year (YOY).
ABC Chief Economist Anirban Basu said in a statement that both the construction and manufacturing industries are experiencing job growth across the country, exceeding ABC’s previous estimates in May and June. Basu noted his uncertainty as to how these new jobs were created given the low numbers in certain professions, such as carpenters, electricians, welders and glass installers.
“One hope is that more workers are gravitating toward construction, which offers increasingly rare opportunities for people to enter the middle class without taking on student debt,” Basu said in a release. “The other hope—and there is evidence to suggest this is already occurring—is that companies will invest heavily in the capabilities of these people, inducing more of them to stay in the industry even during the next downturn.”
Despite the upswing in construction jobs, the country’s overall employment growth is below expectations at 157,000, or 3.9%.
—Andrew Michaels, editorial associate