Housing sales gain ground and green construction continues to grow.
Respondents to this year’s Pipe Trades Giants’ survey are staying positive - 58% expect their workload to increase for the remainder of this year and more than half (56%) expect 2012 revenues to increase from 2011 by about 14%. Commercial and industrial projects comprised a good portion of construction work last year (41% for respondents) as the residential new construction market still struggled.
Construction spending in May 2012 totaled $830 billion at a seasonally adjusted annual rate, a 29-month high and a 7% increase from last May. During the first five months of 2012, construction spending rose 9.4% from 2011. In nonresidential construction, lodging, power and manufacturing had double-digit increases from last May, while commercial and health-care construction also saw increases.
Robert Murray, vice president of economic affairs at McGraw Hill Construction, notes in the 2012 Dodge Construction Outlook Midyear Update that overall new construction starts are predicted to rise 2% this year. Weaker performance by the institutional sector - namely education and health-care building - is offset by the “strong but steady gain in single-family housing over the last year.” Home building is expected to see steep increases in 2014.
New home sales have been rising about 20% this year, the National Association of Realtors reports, and may reach 600,000 by 2013, doubling the 2011 figure of 300,000. In contrast, 1.2 million homes were sold at the height of the real estate bubble in 2005.
While figures have been mixed this year, the U.S. Commerce Department notes housing starts in June 2012 rose 6.9% from the previous month and 23.6% from the same period in 2011. June building permits saw a decrease of 3.7% from May, but a 19.3% increase from June of last year. The National Association of Home Builders reports gains in multifamily contruction as its Multifamily Production Index rose for the seventh straight quarter to its highest level since 2005. Builders see a higher increase in rental units over for-sale units, but the for-sale indicator also is rising.