PROVIDENCE — Gilbane Building Company, which recently released the summer 2013 edition of “Construction Economics – Market Conditions in Construction” — projected that construction spending for 2013 will exceed spending for 2012 by 5 percent, the company announced Thursday.
Gilbane expects continued positive growth for the construction industry based on “an array of economic data, construction starts and material cost trends,” according to the release.
“Supported by overall positive growth trends for year 2013, I expect margins and overall escalation to climb more rapidly than we’ve seen in five years,” Ed Zarenski, author of the report and a 40-year veteran of the construction industry, said in a statement.
Although work activity in nonresidential buildings construction slowed in the first five months, Zarenski’s report predicted that activity will rise significantly in the second half of 2013.
Additionally, the report pointed to two leading indicators, the Architectural Billings Index and McGraw Hill New Construction Starts, that suggest an increasing rate of activity in the second half of 2013. The Dodge Momentum Index, a monthly measure of the first report for nonresidential building projects in planning, while down recently, also supports expectations of an increasing rate of activity
“The cheapest time to build is now behind us,” Zarenski said, pointing to an expected rise in borrowing costs that “will add potential cost to future funding of projects.”
The report also found that the construction workforce remains “25 percent below the peak.” Combined with an expected increase in workload in the next few years, a lack of available, skilled workers can negatively impact productivity, cost and construction volume, according to the report.