Top Construction Economist: 'Good Times To Continue'
Yes, asia’s financial troubles bear watching. And everyone knows the current building boom can’t last forever. Nonetheless, when McGraw-Hill Construction Information chief economist Robert Murray rhetorically asked, “Where are the imbalances that will derail this expansion?,” he answered, “They are hard to find at the moment.”
Murray told the 40th Annual Meeting of the Construction Writers Association on May 1 that the nation continues on a path of “strong GDP (Gross Domestic Product) growth without inflation. The question for 1998 is, will there be an impact from Asia? Nobody knows, but there’s no smoking gun yet for inflationary pressures that would cause the Fed to tighten up.”
Highlights of his construction update:
- All of the F. W. Dodge indicators — contract awards, construction put in place, building materials shipments and construction equipment purchases — show stable, upward trend lines.
- The growth of real estate investment trusts (REITs) are spurring commercial building, including the first significant upswing in office construction of the decade. Office construction now tops 200 million sq. ft. annually, more than halfway to the record highs achieved during the overbuilding boom of the 1980s. This, even though office workers don’t require as much space as they used to due to the modern cubicle concept of office interiors.
- A new category of “entertainment projects” are becoming popular, combining retail malls and various amusement facilities.
- School construction is booming, along with a curious rise in religious facilities. Murray noted that the current trend in school building is more stable than that of the 1960s, when the baby boom came along in such a spurt that many school districts responded by opening temporary classrooms. The current “baby boom echo” is resulting in more of a “long, slow rising wave.”
“Certainly these are good times,” said Murray. “It looks like the good times will continue.”