I am often asked, “How are you guys doing?” My answer surprises almost everyone: The last two years have been e-Builder’s most successful. Most people just scratch their heads in confusion.
It’s no secret that since the recession started in December 2007, the construction industry has suffered right along with many other industries. According to McGraw-Hill Construction, a division of The McGraw-Hill Companies (a minority investor in e-Builder), construction starts have declined for the past three years (26 percent in 2009, 13 percent in 2008, and 7 percent in 2007). Retail, hospitality and industrial sectors are among those most affected.
Despite building and renovation activity slowing, construction didn’t grind to a halt when the economy faltered. Consider the following:
Even during a recession, people become ill or injured. Healthcare/medical building is based on demographics and need, not economic conditions. Plans for new hospitals were already underway long before the recession began. Remember, it can take years to get a certificate of need and all the necessary approvals to build a new medical facility. The latest report from McGraw-Hill noted that five projects in excess of $100 million started just last month, boosting healthcare construction 59 percent in June.
Similar to healthcare, school building construction is a necessity born out of growing communities and aging facilities. Children don’t stop going to school in a recession. And while operational budgets might tighten, new schools must be built. According to American School & University’s 35th annual Official Education Construction Report, construction rose in 2008 after four years of the declines in total annual expenditures. Thanks to the American Recovery and Reinvestment Act (ARRA) of 2009, many schools (both K-12 and higher education) are taking advantage of federal stimulus and tax credit bonds for school modernization projects.
Government buildings and projects are also benefitting from the federal stimulus bill. ARRA set aside $5.5 billion for the U.S. General Services Administration (GSA) to renovate existing government facilities into green buildings and to build new energy-efficient federal buildings. The ARRA funding is enabling the construction and modernization of courthouses nationwide.
e-Builder is currently involved in several stimulus projects, including the Alamo Regional Mobility Authority, which is leveraging e-Builder on the largest Federal Stimulus Project in Bexar County, Texas.
In summary, many of the sectors that e-Builder serves continue to build; and owners that are building need construction management software. That is one of the reasons that we continue to grow, but it’s not the main one. In the next post, I’ll tell you about the No. 1 reason that the company is seeing more success today than ever before.
SOURCES:
http://construction.com/ResourceCenter/forecast/2010/Jan.asp
http://construction.com/ResourceCenter/forecast/2010/Jul.asp
http://www.edfacilities.org/school-modernization/
http://www.ncef.org/cd/McGraw-Hill-Construction-Data.pdf
http://www.ncef.org/cd/School-Construction-Data-1999-2008.pdf
http://asumag.com/Construction/planning/education-construction-report-200905/
http://enr.construction.com/business_management/finance/2009/0513-ARRAFunding.asp
http://www.modularconstructionnews.com/ME2/Audiences/dirmod.asp?sid=&nm=&type=news&mod=News&mid=9A02E3B96F2A415ABC72CB5F516B4C10&tier=3&nid=E75C4EAC2D1B415F921B29926BF3CEAA&AudID=A8CD3887511441F7AA259DA5A2CCFA71
http://www.aronsonblogs.com/gcsg/?p=462
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