Looking Forward in the Construction Industry – Q3 2010 Construction Trends Considered
Wednesday, July 28th, 2010 at 3:32 pm
We’ve heard all the doom and gloom in the construction industry, as everything just completely crashed as the real estate disaster occurred and triggered the global economic meltdown and crisis. After the crash, there was literally a front page article every day in all the newspapers for 18-months straight, needless to say, no one was interested in building, buying, or even pulling permits on new projects. Well, it looks like we have finally turned a corner.
Meaning that many of the articles we are reading concerning the Construction Industry, about contractors, construction management, or construction trends is somewhat positive. Manufacturing of construction equipment is up, and there are many recent large scale developments, other than the known stimulus (so-called shovel ready projects) moving forward.
The government statistics show us moving forward at the end of Q2 in 2010, as construction spending was up sharply in April of 2010 over the previous month of March, and get this it was up 2.7% over all. Home Construction projects put forth spending exceeding 4.5% over the same time period. Obviously, the national US trends are different than the most battered states, but all regions showed improvement, meaning the trend stands, and momentum is building, literally, we are building again.
The construction was really across the board this time, new factories, facilities, roads, infrastructure, homes, shopping malls, commercial properties, retail, etc. This recent uptick is by far the biggest gains in a single month I’ve seen in over 10-years, it’s truly amazing, almost to the point of questioning the numbers, but we see things are very good in quite a few industries. We’ve been down month to month one to 4 percent nearly all of 2008, 2009 and the first quarter of 2010 for the most part.
It is interesting that with all this excess capacity of space; retail and commercial office space that we have such an uptick in construction right now. This means jobs, and growth, it’s a good thing. Most are not expecting any type of full recovery until 2011, and yet, we sure see some positive signs in construction right now. The Construction Industry is also having mixed views on confidence levels whereas before it was all doom and gloom.
The trick now is managed growth, which seems to be expected due to the difficulty in getting construction loans now. And by 2011 we will see the interest rates move up again, perhaps keeping things in check. Today, we can smile, and consider these positive signs and by Q4 we will know if this is a trend or just a blip on the radar. Please consider all this.
Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank. Lance Winslow believes all concrete ought to be clean; http://www.concretewashguys.com.
