As 2014 is getting off to a heated start, it seems that most commercial real estate agents are seeing an increase in new construction from around the United States. Giddyness is being shown around the country as most individuals are predicting another rise in construction demand for the non-residential markets. With that being said though, there are still some worries as there is a growing worker shortage, rising material and business costs and of course new regulations/ ending of federal budget cuts.
Even with all of the potential negative, most construction companies and contractors are quite ecstatic at the possibilities that the new year will bring as we see an increase in production for the first real time since the Great Recession 5 years prior. "Contractors are more optimistic about 2014 than they have been in a long time, and should be a better year for the construction industry than any year since 2009," said AGC Chief Executive Stephen E. Sandherr.
In the survey that was taken by 800 commercial real estate firms, 40% expect to expand in 2014 compared to 2013 and less than 20% are forseeing a decline in overall construction and development. The difference between those who believe there will be a greater increase this year and those that are predicting a fall through is a very strong 28% for the commercial real estate office, manufacturing and retail/ warehouse/ lodging, compared to 25% for the energy, hospital and education areas.
"With the auto manufacturers in a bit of resurgence, we’re seeing demand not just from the Big Three automakers, but from second- and third-tier suppliers. That filters down to commercial construction," said Vince DeLeonardis, president of Pontiac. "We’re seeing redevelopment of abandoned auto manufacturing sites, with everything from film to research-and-development to mixed-use projects going into those sites."
It should also be noted that only 9% of the firms surveyed stated that they were having a hard time getting a bank loan, down fom 13% last year. Only 32% even stated that customers' projects were being delayed and/ or cancelled due to the tighter credit issues, in comparison to 40% from one year prior. Overall, all signs point to a very strong 2014 for commercial real estate development. The stats don't lie and it seems that everything points to an even better year than 2013.