Oct 13 2006 6:04AM | Permalink | Email this | Comments (2) |
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It was an upbeat mood at Reed Construction Data’s annual Construction Forecast Conference in Washington earlier this week. The speakers promised continued rapid growth in the nonresidential building market, resumed expansion in the heavy/engineering market and little additional decline ahead in the residential market.

Ken Simonson, chief economist with The Associated General Contractors of America warned that high materials cost inflation is not yet finished in this building cycle but that the worst is probably past. He predicted only modest slowing of price gains for cement products but a very weak pricing environment for predominately sold to residential builders.

Martin Regalia, chief economist at the US Chamber of Commerce laid out a solid case for slightly subpar economic growth for the next two years but with very little risk that the housing downturn could set off recession or even near recession conditions across the economy.

Joshua Scoville, director of strategic research at Property & Portfolio Research (P&PR) told the construction audience that the commercial real estate market is bracing for a flurry of added commercial space in the next few years. Commercial lessors can absorb the space without scaling back development plans because real estate returns are currently relatively high. He expects slower growth ahead in hotel and retail starts but acceleration in office starts. P&PR is Reed Construction Data’s partner in preparing the starts estimates and forecast from RCD’s project database.

I updated the construction spending forecasts for each project type — very little change from the forecast tables currently elsewhere on buildingteamforecast.com.

Conference attendees also heard several industry speakers discuss how rapidly evolving technology is changing the construction industry. Jonathan Knowles of Autodesk demonstrated new software that is beginning to cut the high cost and frustration of construction planning and management. Scott Simpson, president of Stubbins Associates described how his firms’ switch to 100% digital design and early involvement of contractors and materials suppliers has sharply cut project time, project cost and eliminated end of project construction claims for errors and omissions.