Five Emerging Trends for 2007

January 08, 2007 |

Although there are many changes on the horizon, the following have been noted as the most probable:

Green construction is becoming a serious part of the construction process. It is being required to some degree in all government jobs and within five years will be the standard. Green construction is being incorporated into commercial nonresidential buildings with the trend increasing the demand for "green" construction products and technologies. Incentives to go green will push the process. Companies that stayed away from green a couple of years ago are now looking for ways to "go green."BIM, Building Information Management, is becoming an integral part of major construction projects. All parties, owner, architects, engineers, contractors, subcontractors, and suppliers sit down at the beginning of the project to optimize cost and process controls. Jobs that have made use of BIM have reduced costs from 2+ percent to 10+ percent and have reduced construction time from two months to two years. A totally integrated BIM environment results in the elimination of bidding that translates to a savings for the contractor, usually a serious double-digit savings; eliminates shop drawings, thereby speeding up the process and improving profit; prevents cost escalation; eliminates punch lists and finger pointing; minimizes errors and omissions; and facilitates online payment of requisitions. As green building becomes SOP, contractors will have to adopt a BIM system.(Scott Simpson, The Stubbins Associates, RCD Forecast Seminar, 10-06) (Jonathan Knowels, Autodesk, RCD Forecast Seminar, 10-06)A switch is occurring in the apartment/condo market. A few years back, there was a trend converting apartments to condos. The trend has reversed. There is an excessive inventory of condos and a shortage of apartments, so condos are being converted to apartments in many areas. There has been a noticeable decrease in the number of shipments of manufactured homes (NTEA Forecast Seminar, 10-06) and as a result, the need for apartments has increased.(Joshua Scoville, Property and Portfolio Research, REC Forecast Seminar, 10-06)Due to increased tax revenues at the state and local levels, there has been an increase in building and road construction at these levels. In some regions the local governments have grown tired of waiting for federal assistance and have tackled projects on their own, some with creative financing. A couple of states have gone so far as to sell interstates or turnpikes to private interests and are successfully using the money for other projects.Class 7 & 8 truck sales will be down by as much as 40 percent in 2007 and slow to recover due to the young age of existing fleets. This could be a problem for truck manufacturers since a new set of regulations will be going into effect in 2010. Although vehicle sales in the U.S. have remained fairly flat, around 17 million units a year, the fact to note is that U.S. manufacturers have been losing market share in the double-digit percentile range over the last few years. The two domestic manufacturers are both in trouble, closing plants and laying off employees, while the offshore manufacturers are opening plants and hiring.

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