Nonresidential Construction Primed for Strong Second Half, Says Marcum Commercial Construction Index
New York City, NY – The nonresidential construction sector is primed for a strong second half of 2014, according to the Marcum Commercial Construction Index issued today for the second quarter period. Marcum LLP, a top national accounting and advisory services firm, reports that year-over-year nonresidential construction spending through June reflects moderate and ongoing recovery, and that private construction is positioned for more rapid recovery during the months ahead.
“With job growth continuing (200,000+ for six straight months), consumer spending rising, industrial production climbing, and energy production booming, shopping center, office, industrial, pipeline and other nonresidential construction segments should manifest consistent growth going forward,” writes Anirban Basu, Marcum’s Chief Construction Economist, who authored the report. “Private nonresidential construction is positioned for particular improvement during the balance of 2014. However, there will continue to be downward pressure on margins in much of the nation as competition for work remains fierce and demand for workers fiercer.”
“The national construction unemployment rate fell to 7.5 percent in July on a non-seasonally adjusted basis and is now at its lowest level since November 2007, the month before the recession began. As the broader economy continues to improve and certain states with rapidly expanding construction industries begin to feel the effects of the skilled labor shortages, the construction unemployment rate should continue to fall,” Mr. Basu predicts.
The Marcum index found that nonresidential construction spending fell 2.8 percent in June after increases in the first two months of the second quarter. Mr. Basu minimizes the significance of the monthly decline, attributing it to the hard winter that pushed a large volume of construction into April and May.
“After nearly two years of cautious optimism, I’m comfortable predicting without the usual qualification that our industry has arrived into the warm embrace of the economic recovery, fully and finally,” said Joseph Natarelli, Marcum’s Construction Industry Leader and Partner-in-Charge of the Firm’s New Haven office. “As I travel to clients and trade events, I observe a world of enthusiastic bidding and growing profit margins. As usual, it can all come down to your backlog of work, and backlogs are reclaiming their pre-collapse robustness, nationwide.”
Marcum LLP’s Construction Services Group provides strategic and timely accounting, audit, and consulting and taxation services to construction clients ranging from start-ups to multi-billion-dollar enterprises. The firm’s technical experts serve on many industry boards and committees and regularly contribute to construction conferences and publications.
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