US Construction Industry Optimistic for 2013

With more companies planning to recruit staff and raise bid levels, the construction outlook in the USA is improving this year.

In fact, significantly more construction firms are planning to increase their fleet rather than reduce numbers, according to the results of a new survey unveiled by the Computer Guidance Corporation and Associated General Contractors of America.

Amidst worries of rising costs and decreasing construction demand in the public sector, the survey provides a fairly optimistic outlook for 2013, particularly in contractors’ ability to raise bid levels. The number of firms increasing their construction charges has almost doubled from the 15 percent who raised prices in 2012, to 28 percent this year.

Construction Industry 2013

Stephen Sandherr, the association’s chief executive officer, said while many companies are still struggling with major economic headwinds, the hard-hit construction industry should be healthier and more profitable by the end of this year compared to today.

Sandherr noted the amount of expected staff increases compared to layoffs in 2013. At 31 percent, firms planning to expand their work force more than triple those who are trying to reduce it, at 9 percent. However, the scope of this enhancement is likely to be fairly small, with 79 percent of these companies planning to take on 15 or less people in 2013, while 13 percent plan to hire over 25 this year.

Outlook for private sector projects this year is increasingly optimistic among contractors, particularly among higher education and hospital construction. Some 36 percent predict a growth in money spent on these projects while another 39 percent expect the market to remain stable, compared to 2012. Contractors also had a positive outlook for power construction, but had lower predictions for accommodation, warehouse, manufacturing, private offices and retail construction.

Expectations for public construction demand is a little bleaker, with 40 percent predicting a decline compared to only 18 percent who expect growth in the market.

Ken Simonson, the association’s chief economist said unfortunately the causes for optimism and concern almost level out.

“Demand for public buildings is set to decline, manufacturing work appears to be slackening, materials prices and health care costs continue to rise and many firms are reluctant to make major investments in new equipment.”

Image Copyright Magnus Bäck - Courtesy Wikimedia Commons