Fall 2013 Issue of Horizons

Additional Areas of Concern Other concerns expressed in the survey included material prices, tight lending criteria, federal sequestration and overcapacity. The construction industry seems to be consistently hit by extreme volatility in material prices and there are fears that this volatility will increase during the remainder of 2013. In addition, it appears that the lending community remains tight in their lending criteria, which may be hampering growth. The construction industry will also be hurt by the decline in public construction and expectations of more cuts as federal sequestration continues. Many companies that focus on government work are feeling the effects of drained government capital budgets.

non-residential construction spending has certainly increased in 2013, overall spending levels are far from peak levels in 2008. Nonetheless, the increase in non-residential spending in 2013 is encouraging. Several economists are projecting increases in 2013 of 5% or even higher. Certain sectors are expected to do better than others. Segments forecasted to have higher growth include energy, transportation, health care, office and lodging. Shale oil exploration continues to be a bright spot and has been a tremendous boom to several regions. Improvements in residential construction continue to account for most of the growth within the construction industry. Although single family activity has been up and down, economists are seeing increased signs of sustainability with projected growth of 20% or higher in 2013. Multifamily construction was a definite bright spot for the industry in 2012 and is expected to remain very strong throughout 2013. has resulted in increased construction employment. There has been significant improvement in the unemployment rate for construction, although it varies widely by region. There have been reports of skilled labor shortages in several regions as the construction economy continues to improve. In RubinBrown’s construction industry survey, participants were very concerned about the shortage of skilled labor and the effect that it could have on future growth prospects within the industry. Construction Employment The growth in construction activity

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