ARLINGTON, VA-Commercial construction activity seems to have paused in the early spring, at least based on a handful of recently released construction barometers. The Architecture Billings Index remains virtually unchanged, roughly at the break-even level for the first quarter of 2011, the organization reported last week. Also, new construction starts in March were essentially the same as they were in February--a seasonally adjusted annual rate of $404.9 billion--according to McGraw-Hill Construction.
There are pockets of activity in the construction space, though, Associated General Contractors of America’s chief economist, Ken Simonson, tells GlobeSt.com. Namely, he says, construction of data centers, market-rate apartment buildings and manufacturing facilities all have growth potential and are seeing activity.
The data center category, he says, is a small but highly active space right now, with demand coming from high-tech companies and other firms that operate websites or otherwise need a lot of computing power. Manufacturing, which was not as badly hit during the recession as other sectors, is also doing well, particularly as commodity prices continue to increase.
The liveliest of them all, he says, is market-rate apartments. “Here, we are seeing several trends intersect. Employment is coming back so people are moving out of their parents’ basements and getting apartments. But there is still a hesitancy to get back into home ownership.”
One decidedly negative factor is the scaling back of federal spending. “Schools, public works projects, hurricane protection in New Orleans, the stimulus projects--these all kept people employed and we are seeing a lot of these projects finish with nothing to replace them.”
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