Ken Simonson says . . .
Ken Simonson says . . .
In a webinar held on December 13, Ken Simonson, chief economist, AGC of America, talked about the economy moving forward. Ken stated that there will be continued weakness in the office and retail markets but other commercial work such as warehousing and wholesale facilities will continue some growth as will data centers. He noted that power (oil, gas pipelines) will continue to grow. Apartment building construction is another growth area throughout the country.
Over 85% of the highway dollars have been paid out and GSA has awarded all of its dollars through this fiscal year, which ends in June 2012. The stimulus, BRAC and Gulf Coast hurricane dollars that fueled many projects are all ending or tapering off shortly. Ken also talked about the fact that 500,000 people have left the construction industry to date and there does not seem to be a rush to come back to the industry for many of them even if work picked up. On the materials side, Ken stated that overall pricing is up 14% since 2009.
Ken then talked about his thoughts on the next five years, 2012-2016 – the new reality:
Less housing, retail declining, public spending down. The new drivers will be shale-based gas and oil (great for North Dakota and Oklahoma!), more elderly people and young children. There will be fewer late teens/early 20s to take over the jobs from retirees. Materials should rise about 3 – 8 % with labor up 2-4% with fewer people and bid prices up 2 – 5%.
Notes from webinar by Ken Simonson on 12/14/11