Forecast 2011

Sean Meehan, LEED AP

Another year has passed, and many in the construction industry are still waiting for that elusive ‘recovery’ to kick in.  Statistically speaking, 2010 was disappointing in the overall sense, but there were also some highlights that may foreshadow a better outlook for 2011.  Let’s take a look at the data and forecasts that are out there for present activity, as well as for the future.

The AIA’s Architecture Billings Index (ABI) is an economic indicator that tracks architecture billings and new project inquiries on a month-to-month basis.  A cross-section of A/E firms is polled to gather billing data, and this data is then adjusted for historical seasonal variation using the Census Bureau X-12 software.  Currently, the November ABI shows an overall national strengthening in billings, but the West region continues to lag behind other parts of the country, and commercial/industrial construction has dipped slightly from the previous three months, which had reflected modest growth.  Read more about the current ABI here:  November Architectural Billings Index

McGraw-Hill Construction, the construction industry division of the publishing giant, issues a construction index that reflects new construction valuations.  Their November report reflects an overall decline, but with some strengthening in residential construction.  The data in this report is not encouraging, but there is typically a lag that occurs between architectural billings and construction activity and in their discussion of this month’s index, they describe an up-and-down pattern for construction at the moment.  See more details on the current construction index here:   November Construction Index

McGraw-Hill also releases an annual forecast for the construction industry, and while 2011 is predicted to reflect a slow recovery, their 2010 forecast was quite a bit off, and these kinds of far-reaching predictions should be taken with a grain of salt.  The Wall Street Journal analyzes the predictions of the 2011 Construction Forecast here:  McGraw-Hill 2011 Construction Outlook

Statistics and predictions are one thing, but at ADMG we have seen and heard of first hand growth which looks promising.  We know some architects that are doing very well with design work, and we hear that some local firms are re-hiring employees laid off earlier in the recession.  Overall activity still seems low in California (with the exception of healthcare and K-12), but there is a sense that things have bottomed out and that we may experience a slow but steady growth in the future.    We are optimistic, we are setting our goals appropriately, and we will be wishing all of our friends and associates a fantastic 2011!

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Filed under BUSINESS & ECONOMY, CONSTRUCTION, DESIGN

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