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Health care, education among “hottest markets” for design, construction firms in 2008

Higher education construction is at record levels, with colleges and universities upgrading and expanding residence halls and educational facilities to deal with increasing enrollments. photo courtesy of SWA, Stanford University.

According to the 2008 AEC Industry Outlook: Strategy and Insight for Design & Construction Firms report from ZweigWhite, health care, K-12 schools and higher education, telecommunications, and power/energy is where the action will be for design and construction firms in 2008.

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These markets are similar to last year’s list, except K-12 schools and telecommunications replace last year’s water supply/wastewater, and highways/bridges.

The report projects residential construction will continue to decline through the first half of 2008, but the growth of institutional construction, e.g., higher education and health care, should balance out the decline in the residential market.

‘’The demand for new and improved health care facilities is driving a flurry of design and construction activity, and 2008 looks to be another strong year for this market,’’ says Elaine Kornbau, executive editor of best practices publications and market intelligence reports at ZweigWhite. ‘’That translates into good news for firms serving the health care market as more hospitals and facilities invest in modernizations and expansions. Similar trends are also appearing in the higher education and the power and energy markets.’’

Higher education construction is at record levels, and colleges and universities are still upgrading and expanding residence halls and educational facilities to deal with increasing enrollments. The competition for new students is further driving the growth of the market.

The sharp increase in energy prices in 2007 have energy companies flush with revenue to invest in capital in major infrastructure projects. The K-12 market has flattened a bit but is still a large, solid market for design and construction firms. K-12 enrollment is beginning to grow again, particularly in the South and West.

The telecommunications market has shown significant growth since the beginning of 2004, with record investments in their infrastructures to compete in wireless, broadband, and voice-over-internet protocol services.

Architecture, engineering and construction (AEC) firm leaders surveyed in conjunction with the ZweigWhite report remain confident about the forecast of their industry’s performance in 2008. The survey found that 50 percent of the respondents expect the AEC business to outperform the U.S. economy in 2008; 16 percent expect the design and construction industry to lag behind the U.S. economy. In addition, 51 percent of the respondents expect their 2008 business performance to be either ‘’outstanding’’ or ‘’excellent’’; only five percent anticipate poor performance.

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June 16, 2019, 10:25 pm PDT

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