Design and Construction Market Outlook Forum

Upcoming Design and Construction Market Outlook Forums
In upcoming sessions, we will be discussing:
Residential Construction
Office Construction
Infrastructure
Education
Science/Technology
and
The New Normal

To Join our sessions

SUMMERY  AND SLIDE DECK

Review / Download the slide deck here

 

Session Presenters

  • Richard Vermeulen, Principal, Vermeulens
  • Blair Tennant – Associate Principal, Vermeulens
  • Brent Bertrand – Sr. Vice President, Dynamic Systems Inc
  • Kevin Moses – Vice President, Big State Electrical
  • Daniel Doherty – Senior Director, Shawmut Design & Construction

Q2 Market Outlook Highlights, Vermeulens

  • Non-residential construction demand has decreased; construction employment experienced a pull-back in Q2
  • Non-residential and infrastructure construction volume is down 4.6% and 5.4% YOY respectively
  • Residential construction volume is up by 36%
  • Construction employment is down 38,000 jobs from last quarter unemployment rate is currently sitting at 7.5%.This is down from 8.6%, indicating a contraction in the labor force, possibly due to the resurgence of the pandemic
  • Recommending 0.5% escalation moving through the second half of 2021
  • Recommending 5% in bidding contingency for busy markets
  • Design Add Alternates in the magnitude of 10%

Market Insights, DSI, BSE, Shawmut

  • DSI: Labor is up dramatically since the beginning of the year, much of the increase has been in the high-tech sector
  • BSE: Mask requirements have returned to job sites and vaccination requirements are being discussed
  • BSE: Experiencing issues with delivery drivers, which is resulting in a 7-10% productivity loss
  • Shawmut: Anticipating material price moderation which will keep contractor and supplier margins competitive
  • There has been a skilled labor shortage due to overtime premium and incentives by large corporations
  • Material prices have skyrocketed in the past 2 years; however, prices seem to be leveling in Q2
  • Companies are currently exploring material substitutions, to combat supply costs
  • Tighter margins due to higher material costs and long lead times
  • Sourcing materials locally eliminates international shipping delays

The New Normal – Volatility vs Escalation vs Inflation, Vermeulens

  • For non-residential construction, inputs to construction have increased by 26.3% however bid prices have only increased by 3.4%
  • Unemployment is currently driven by the reopening of economic sectors as opposed to aggregate demand
  • We could see upward pressure on prices if spending rebounds quickly; these one-time increases in prices are likely to only have a transient effect on inflation
  • Fiscal stimulus has limited the damage done by the pandemic
  • A thorough analysis of the infrastructure deal (primary goals and cost-benefit analysis) 

Northeast Leads the Way, Bond Brothers

  • backlogs are up year over year, still down 1 month from 2020 peak
  • 80%+ of contractors are expecting increased sales volumes
  • some skilled labor shortages in some sectors

Next Session – September 3, 2021

  • Design-Build, Design Assist
  • Contractor Insight 

Reports and Slide Decks

expand each section for the agenda and access the pdf file

November