Editorial
 
 

It’s that time of the year again when most construction publications serve up their version of a 
forecast for the coming year.  At the risk of sounding pompous, I thought I would throw in my 
two cents worth.  As we go to press, several financial indicators show that business activity is on 
the rise and ever so slowly returning to normal.
	
I thought it was interesting that the media kept harping on the fact that retail stores had 
experienced a lack-luster Christmas and talked about low consumer confidence levels.  In the next 
story, they would talk about the short buying season this past year between Thanksgiving and 
Christmas, the “official” retail Christmas sales extravaganza when the season is measured.  Some mentioned that stores were reporting sales were up prior to Thanksgiving.  Too bad they couldn’t officially count that as Christmas shopping.  Do you think some people might have shopped before the official start since the season was so short?  Of course not, that would require deductive reasoning on the part of the media.
	
Other related stories talked about catalog sales being up for the Christmas season and the fact that internet sales had gone up drastically since last year.  Obviously, the media’s not making the connection.  The money was being spent, just not in the same manner it was ten years ago.  The consumer had changed their buying habits, and once again the media was out of touch with reality.  A lack of consumer confidence?  I don’t think so, but like a self-fulfilling prophecy, if they repeat it enough, it will come to pass.
	
Many have referred to the construction industry as the engine that pulls the economic train.  Without a strong construction industry, the economy isn’t moving.  So how does the construction industry look for 2014?  McGraw Hill Construction reports that construction starts in December were up 5% nationwide (see Construction Stats on page 36).  Additionally, the GNP grew in 2013 and reached an all time high in the third quarter.
	
FMI reports that early forecasts for 2014 show annual Construction-Put-In-Place (CPIP) continues its growth of 7%.  They further state that residential construction is expected to grow 12% in 2014.  FMI also reports that the increase in residential construction and tax revenues will help bring the educational construction market back in many areas of the country.
	
Overall buying trends for new equipment continue upward.  Heavy construction equipment sales and leases are up.   The use of heavy construction equipment usually precedes actual building activity by six to eight months.
	
Compensation of construction industry executives is taking a different course.  Rather than salary increases or bonuses, some construction firms are taking a cue from project managers and negotiating percentages and banking on project future earnings.
	
While there may be small pockets of gloom in some areas, there seem to be more pockets of prosperity.  The U.S. Labor Department reports that, as of March 1st, the United States jobless claims are down to a three-month low, and the U.S. Bureau of Economic Analysis says that personal spending rose in January, $48.1 billion over December 2013.
	
What about the long-term forecast?  The Freedonia group is predicting the demand for roofing in the United States to rise by 3.5%, annually through 2017.  They are also predicting that roofing for new residential construction should rise at double-digit annual rates.  
	
The use of construction material, and the architects, designers, specifiers, and contractors required to put these materials in their proper places, should be a source of steady employment growth for the next few years.

Marcus Dodson
editor & publisher
Construction Economy Up
Indicators Point to a Strong 
Construction Market Ahead