Construction’s Impact on 2011 and Outlook on 2012

Yesterday, several Interface Consulting members attended The Associated General Contractors (AGC) 2012 Houston Annual Meeting. The meeting opened by addressing the State of the Chapter and was followed by AGC Houston President Jerry Nevlund’s Special Presentation, which awarded Patrick J. Kiley with AGC’s Honorary Life Membership Award.

The attendees were then introduced to Houston Mayor Annise Parker, who presented on the State of the City highlighting the role construction has played, and will continue to play, in the city’s economy.  She also touched on the city’s plan to rebuild the drainage systems, grow the economy by entering new markets such as medical and pharmaceutical manufacturing, and the effort to increase efficiency in the face of the economic downturn.

AGC - Construction Spending

Associated General Contractors of America

Mayor Parker then turned the meeting over to Ken Simonson, AGC of America Chief Economist. Mr. Simonson’s presentation on the State of the Industry began by reviewing the United States’ construction spending trends for the last several years. Of note, November 2011 reached a spending high for the last 17 months at $807 billion for the Seasonally Adjusted Annual Rate (SAAR). He also reviewed construction employment, which has increased over the last year in 131 metro areas, decreased in 146, and was unchanged in 60 out of the 337 areas reviewed. The presentation ended with his outlook on construction in 2012. Office and retail construction is projected to face problems, while power, manufacturing, warehouses, and hospitals will likely see growth. He also predicts a surge in apartment construction, uncertainty in single-family housing, and continued governmental cuts at the federal, state, and local levels.

While the industry hopes for an up-turn in spending and employment, only time will tell how construction will shape up in the coming year.

Interested in more? Please visit the links below for additional views on construction spending and economic activity:

Associated Builders and Contractors’ Construction Economic Update

NPR, “Construction Spending Increases…”

Bloomberg, “Construction Spending in U.S. Rises…”

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