Slow-growth economy continues to boost renovations over new construction

Major renovation projects—those costing more than $100,000—climbed as a share of total nonresidential construction as the recession began and haven’t yet come down, breaking from historic patterns. In a low-growth environment, many companies can’t justify adding or expanding to their facilities, said Brian Jacobsen, chief portfolio strategist at Wells Fargo Advantage Funds. Instead, business leaders are trying to make better use of existing structures to minimize costs.
Oct. 22, 2013
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Major renovation projects—those costing more than $100,000—climbed as a share of total nonresidential construction as the recession began and haven’t yet come down, breaking from historic patterns.

In a low-growth environment, many companies can’t justify adding or expanding to their facilities, said Brian Jacobsen, chief portfolio strategist at Wells Fargo Advantage Funds. Instead, business leaders are trying to make better use of existing structures to minimize costs.

Updates to commercial, manufacturing, and institutional structures made up 26.7% of total nonresidential building starts in the first eight months of 2013, little changed from the 26.3% average in 2010-2012 following the 18-month recession that ended in 2009. That compares with 18.8% in the prior decade. Renovations are forecast to grow 2% this year to $41.9 billion.

(http://www.bloomberg.com/news/2013-09-11/companies-forego-new-buildings-for-renovations-ecopulse.html)

About the Author

Drew Ballensky

Drew Ballensky is general manager of Duro-Last Roofing, Inc.’s central U.S. facility in Iowa and company spokesman for Duro-Last’s cool roofing, sustainability and architectural education programs. He is past-president of the Chemical Fabrics and Film Association and chairman of CFFA’s Vinyl Roofing Division. Drew earned his bachelor’s degree in industrial technology from the University of Northern Iowa and master’s degree in business administration from Florida State University. Drew has over 29 years experience in business and industry in various engineering and managerial capacities. He has worked in the U.S. and Canadian operations for a major international manufacturer of pre-engineered steel buildings, was a financial analyst with a major athletic apparel manufacturer and was an owner of a general contracting company.
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