{"id":6957,"date":"2012-04-01T00:00:00","date_gmt":"2012-04-01T00:00:00","guid":{"rendered":"https:\/\/insulation.org\/io\/articles\/gazing-into-the-crystal-ball-4\/"},"modified":"2024-03-05T22:58:30","modified_gmt":"2024-03-05T22:58:30","slug":"gazing-into-the-crystal-ball-2012","status":"publish","type":"articles","link":"https:\/\/insulation.org\/io\/articles\/gazing-into-the-crystal-ball-2012\/","title":{"rendered":"Gazing into the Crystal Ball 2012"},"content":{"rendered":"<p>Trying to determine what\u00a0the future holds? These three construction reports may give you the insight you\u00a0need to predict the future.<\/p>\n<h3>U.S. Demand for Insulation\u00a0to Approach $9 Billion in 2016<\/h3>\n<p>U.S. demand for insulation is forecast to rise 7.8 percent\u00a0annually to $8.9 billion in 2016.\u00a0 Advances will be driven by a rebound in\u00a0building construction expenditures from a depressed 2011 base.\u00a0 Further growth\u00a0will be spurred by changes in building codes and continuing consumer interest\u00a0in reducing energy consumption and utility bills.\u00a0 Home owners and building\u00a0owners will add or upgrade insulation to achieve these goals. These and other\u00a0trends are presented in Insulation, a new study from The Freedonia Group, Inc.,\u00a0a Cleveland-based industry market research firm.<\/p>\n<p>The residential market will post the most rapid\u00a0gains through 2016, advancing at a double-digit pace as housing starts\u00a0rebound.\u00a0 Moreover, builders will construct homes with larger amounts of\u00a0insulation to make them more desirable to potential buyers. Residential\u00a0insulation demand will also be supported by the attic reinsulation and home\u00a0improvement and replacement markets.\u00a0 Insulation demand in the nonresidential\u00a0market will also see solid advances.\u00a0 Rebounding nonresidential building\u00a0construction expenditures, particularly in the office and commercial segments,\u00a0will promote gains.<\/p>\n<p>Fiberglass insulation accounted for the largest\u00a0share of insulation demand in 2011, with 48 percent of the market by value.\u00a0Fiberglass insulation will remain the market leader in 2016, with demand rising\u00a08.1 percent annually to $4.4 billion.\u00a0 Growth will be spurred by a rebound in\u00a0the residential market.\u00a0 Fiberglass insulation remains a popular choice with\u00a0builders and contractors because of its low cost, favorable insulative\u00a0properties and ready availability.<\/p>\n<p>Demand for foamed plastic insulation, which\u00a0accounted for the second-largest share of the market in 2011, is expected to\u00a0rise 7.3 percent per year to $3.9 billion in 2016.\u00a0 Advances will be driven by\u00a0the rebound in building construction spending.\u00a0 Demand for radiant barrier and\u00a0reflective insulation is anticipated to grow 8.7 percent per year to $190\u00a0million in 2016.\u00a0 The rebounding housing market will boost demand, with further\u00a0gains supported by increases in industrial and nonresidential building\u00a0construction spending.\u00a0 Growth will be concentrated in the South and West\u00a0regions, as structures in those regions are more often exposed to sunlight, and\u00a0thus best benefit from the use of radiant barriers and reflective insulation.<\/p>\n<p><img decoding=\"async\" src=\"\/articles\/pubimages\/io\/12\/IO120405_01.jpg\" \/><\/p>\n<p>Insulation<i> (published 03\/2012, 331\u00a0pages) is available for $5100 from The Freedonia Group, Inc. For more\u00a0information, visit www.freedoniagroup.com.<\/i><\/p>\n<h3>FMI Releases\u00a0Nonresidential Construction Index\u00a0 (NRCI) for the First Quarter, 2012<\/h3>\n<p><b>Hiring Prospects and\u00a0Construction-Put-in-Place Improve While Heavy Price Competition Continues<\/b><\/p>\n<p>The NRCI gained 7.8 points over last quarter to 58.1 this quarter.\u00a0This positive move to start the new year is not exactly the sign of a bull\u00a0market for construction, but continuing confirmation that panelists believe\u00a0that the construction activity is following the lead of the slowly improving\u00a0economy. There are good signs in hiring plans for 2012, as well as\u00a0construction-put-in-place predictions. However, panelists indicate that low\u00a0project pricing and high competition are still driving the market place.<\/p>\n<ul>\n<li><strong>Hiring:<\/strong> A five percentage points increase over this time last year, 42 percent of panelists\u00a0indicated a zero to five percent increase in full-time direct employees.\u00a0Additionally, fewer panelists indicated a reduction in salaried employees.<\/li>\n<\/ul>\n<ul>\n<li><strong>Construction-Put-In-Place:<\/strong> Expectations for CPIP are positive but cautious, as 41.3 percent of panelists\u00a0expect growth of 0.5 to 2.5 percent for 2012.<\/li>\n<\/ul>\n<ul>\n<li><strong>Overall Economy:<\/strong> The component for the overall economy showed the strongest improvement of all index\u00a0components, with a jump from 43.6 last quarter to 68.7 in the first quarter, a\u00a025-point gain. This score reflects the improvement in many economic indicators\u00a0including the unemployment rate.<\/li>\n<\/ul>\n<ul>\n<li><strong>Nonresidential Building Construction Market Where Panelists Do Business:<\/strong> At just 54.9, the\u00a0local markets for nonresidential construction are inching ahead. However,\u00a0panelist responses reflect a perception that their own business is performing a\u00a0bit better than the overall nonresidential construction market. This indicates\u00a0that local markets are still very competitive.<\/li>\n<\/ul>\n<ul>\n<li><strong>Cost of Materials:<\/strong> Despite a slow economy, material costs continue to rise, with no panelists\u00a0indicating material costs were lower than last quarter. The cost of materials\u00a0component moved down nearly 5 points to 26.2. This factor is continuing drag on\u00a0the overall index and is likely to raise the cost of projects while lowering\u00a0profit margins for contractors.<\/li>\n<\/ul>\n<ul>\n<li><strong>Cost of Labor:<\/strong> The cost of labor improved just slightly to 41.5, indicating little change over the\u00a0score of 40.0 last quarter. However, no panelists indicated they were\u00a0experiencing lower labor costs.<\/li>\n<\/ul>\n<ul>\n<li><strong>Productivity:<\/strong> Contractors are continuing to make moderate gains in productivity. However, at\u00a052.9, this component is still too weak to offset rising costs for labor and\u00a0materials.<\/li>\n<\/ul>\n<p><i>For more information, visit <a href=\"http:\/\/www.fminet.com\" target=\"_blank\" rel=\"noopener\">www.fminet.com<\/a>.<\/i><\/p>\n<h3>February Construction\u00a0Falls 7 Percent<\/h3>\n<p>At a seasonally adjusted annual rate of\u00a0$376.0 billion, new construction starts in February dropped 7% from the\u00a0previous month, according to Robert Murray&#8217;s monthly report for McGraw-Hill\u00a0Construction, a division of The McGraw-Hill Companies. The nonbuilding\u00a0construction sector, comprising of public works and electric utilities, lost\u00a0considerable momentum in February; and diminished activity was also reported\u00a0for nonresidential building. Meanwhile, residential building in February was\u00a0able to register modest growth. For the first two months of 2011, total\u00a0construction starts on an unadjusted basis came in at $52.9 billion, down 14%\u00a0from a year ago. For the 12 months ending February 2012 versus the 12 months\u00a0ending February 2011, which lessens the volatility present in year-to-date\u00a0comparisons of just two months, total construction starts were down 2%.<\/p>\n<p>The February statistics\u00a0lowered the Dodge Index to 80 (2000=100), compared to 85 in January. For 2011\u00a0as a whole, the Dodge Index averaged 91. &#8220;The pace of construction starts\u00a0during the first two months of 2012 was subdued, retreating to the lower end of\u00a0its recent range,&#8221; stated Robert A. Murray, vice president of economic affairs\u00a0for McGraw-Hill Construction. &#8220;Renewed expansion for the construction industry\u00a0is still struggling to take hold, with gains for a few project types such as \u00a0ultifamily\u00a0housing being outweighed by declines for project types that are largely\u00a0publicly financed. This was especially the case in February, when much of the\u00a0downward pull came from weakness for public works and institutional building.&#8221;<\/p>\n<p>Nonresidential building, at\u00a0$127.6 billion (annual rate), dropped 7% in February. A large part of the\u00a0shortfall came from a 22% slide for educational buildings, continuing the\u00a0descent for this category, which has been underway for the past three years.\u00a0Public buildings (courthouses, detention facilities, and military buildings)\u00a0weakened further in February, plummeting 46%. The healthcare facilities\u00a0category in February decreased 9%, despite groundbreaking for a $335 million\u00a0medical center replacement project in Joplin, MO and a $180 million hospital\u00a0tower in Oakland, CA. The other institutional categories reported gains in\u00a0February, including a 22% increase for amusement-related work, which was helped\u00a0by a $105 million convention center expansion in San Jose, CA. Transportation\u00a0terminal work in February advanced 45%, helped by the $78 million addition to\u00a0Terminal B at George Bush Intercontinental Airport in Houston, TX and a $44\u00a0million renovation project at Grand Central Station in New York, NY.<\/p>\n<p>On the commercial side, warehouses\u00a0and hotels retreated in February, falling 8% and 47% respectively. Office\u00a0construction improved 11%, reflecting such projects as a $106 million Social\u00a0Security Administration building in Baltimore MD; a $75 million renovation to\u00a0the U.S. Department of Commerce building in Washington, DC, and a $65 million\u00a0corporate headquarters in Malvern, PA. Store construction in February was able\u00a0to advance 35% from a weak January, aided by the start of a $300 million\u00a0observation restaurant and entertainment venue in Las Vegas, NV. The\u00a0manufacturing plant category in February increased 9%, boosted by a $99 million\u00a0upgrade to a solar panel manufacturing plant in Portland, OR.<\/p>\n<p>Residential building in\u00a0February grew 3% to $140.6 billion (annual rate). Most of the upward push came\u00a0from multifamily housing, which rebounded 10% after sliding back in January.\u00a0Single family housing, up 1%, essentially held steady in February, due to a\u00a0mixed performance by region?the South Atlantic, up 8%; the Midwest, up 5%; the\u00a0Northeast, down 1%; the West, down 2%; and the South Central, down 3%.<\/p>\n<p>The 14% decline reported for\u00a0total construction on an unadjusted basis during the first two months of 2012,\u00a0compared to 2011, was the result of a mixed performance by major sector.\u00a0Nonresidential building dropped 17% year-to-date, reflecting this pattern? commercial\u00a0building, down 9%; institutional building, down 15%; and manufacturing\u00a0building, down 54%. Residential building climbed 20% year-to-date, with\u00a0multifamily housing up 23% while single- family housing grew 20% from its very\u00a0weak amount at the start of last year. Nonbuilding construction fell 33%\u00a0year-to-date, due to a 20% retreat for public works and a 56% reduction for\u00a0electric utilities. The size of the year-to-date decline for nonbuilding\u00a0construction was affected by the comparison to elevated activity during the\u00a0first two months of 2011, which included such large projects as a $2.5 billion\u00a0solar power facility in California and $2.1 billion for work on the LBJ Freeway\u00a0in Dallas, TX. By region, total construction starts in the first two months of 2012\u00a0showed an increase for one region, with the South Atlantic climbing 7%, while\u00a0declines were registered by the other four regions?the\u00a0Midwest, down 2%; the West, down 11%; the Northeast, down 21%; and the South\u00a0Central, down 32%.<\/p>\n<p>The 2% drop for total\u00a0construction on a 12-month moving total basis, meaning the 12 months ending\u00a0February 2012 versus the twelve months ending February 2011, was the result of\u00a0this behavior by major sector?nonresidential building, down 3%; residential\u00a0building, up 8%; and nonbuilding construction, down 10%. By geography, the 12\u00a0months ending February 2012 showed the following performance for total\u00a0construction?the South Atlantic, up 13%; the West, up 3%; the Northeast and\u00a0Midwest, each down 8%; and the South Central, down 12%.<\/p>\n<p class=\"MsoNormal\" style=\"justify;line-height: 120%; text-autospace: none; middle;border: none; padding: 0in;\"><i>McGraw-Hill Construction connects people,\u00a0projects, and products across the construction industry. For more than a\u00a0century, it has remained North America&#8217;s leading provider of project and\u00a0product information, plans and specifications, and industry news, trends, and\u00a0forecasts. To learn more, visit <a href=\"http:\/\/www.construction.com\" target=\"_blank\" rel=\"noopener\">www.construction.com<\/a>.<\/i><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Trying to determine what\u00a0the future holds? These three construction reports may give you the insight you\u00a0need to predict the future. U.S. Demand for Insulation\u00a0to Approach $9 Billion in 2016 U.S. demand for insulation is forecast to rise 7.8 percent\u00a0annually to $8.9 billion in 2016.\u00a0 Advances will be driven by a rebound in\u00a0building construction expenditures from<\/p>\n","protected":false},"author":[326,324,325,656],"featured_media":0,"template":"","categories":[37,302],"class_list":["post-6957","articles","type-articles","status-publish","hentry","category-market-research","category-economy","author-aerotek","author-kermit-baker","author-mick-morrissey","author-nia-staff"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.0 (Yoast SEO v24.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Gazing into the Crystal Ball 2012 - Insulation Outlook Magazine<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/insulation.org\/io\/articles\/gazing-into-the-crystal-ball-2012\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Gazing into the Crystal Ball 2012\" \/>\n<meta property=\"og:description\" content=\"Trying to determine what\u00a0the future holds? These three construction reports may give you the insight you\u00a0need to predict the future. U.S. Demand for Insulation\u00a0to Approach $9 Billion in 2016 U.S. demand for insulation is forecast to rise 7.8 percent\u00a0annually to $8.9 billion in 2016.\u00a0 Advances will be driven by a rebound in\u00a0building construction expenditures from\" \/>\n<meta property=\"og:url\" content=\"https:\/\/insulation.org\/io\/articles\/gazing-into-the-crystal-ball-2012\/\" \/>\n<meta property=\"og:site_name\" content=\"Insulation Outlook Magazine\" \/>\n<meta property=\"article:modified_time\" content=\"2024-03-05T22:58:30+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"8 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/insulation.org\/io\/articles\/gazing-into-the-crystal-ball-2012\/\",\"url\":\"https:\/\/insulation.org\/io\/articles\/gazing-into-the-crystal-ball-2012\/\",\"name\":\"Gazing into the Crystal Ball 2012 - Insulation Outlook Magazine\",\"isPartOf\":{\"@id\":\"https:\/\/insulation.org\/io\/#website\"},\"datePublished\":\"2012-04-01T00:00:00+00:00\",\"dateModified\":\"2024-03-05T22:58:30+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/insulation.org\/io\/articles\/gazing-into-the-crystal-ball-2012\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/insulation.org\/io\/articles\/gazing-into-the-crystal-ball-2012\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/insulation.org\/io\/articles\/gazing-into-the-crystal-ball-2012\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/insulation.org\/io\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Gazing into the Crystal Ball 2012\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/insulation.org\/io\/#website\",\"url\":\"https:\/\/insulation.org\/io\/\",\"name\":\"Insulation Outlook Magazine\",\"description\":\"The only global magazine dedicated to insulation.\",\"publisher\":{\"@id\":\"https:\/\/insulation.org\/io\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/insulation.org\/io\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/insulation.org\/io\/#organization\",\"name\":\"National Insulation Association\",\"url\":\"https:\/\/insulation.org\/io\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/insulation.org\/io\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/insulation.org\/io\/wp-content\/uploads\/sites\/3\/2016\/10\/insulation-outlook-logo.png\",\"contentUrl\":\"https:\/\/insulation.org\/io\/wp-content\/uploads\/sites\/3\/2016\/10\/insulation-outlook-logo.png\",\"width\":229,\"height\":90,\"caption\":\"National Insulation Association\"},\"image\":{\"@id\":\"https:\/\/insulation.org\/io\/#\/schema\/logo\/image\/\"}}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Gazing into the Crystal Ball 2012 - Insulation Outlook Magazine","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/insulation.org\/io\/articles\/gazing-into-the-crystal-ball-2012\/","og_locale":"en_US","og_type":"article","og_title":"Gazing into the Crystal Ball 2012","og_description":"Trying to determine what\u00a0the future holds? These three construction reports may give you the insight you\u00a0need to predict the future. U.S. Demand for Insulation\u00a0to Approach $9 Billion in 2016 U.S. demand for insulation is forecast to rise 7.8 percent\u00a0annually to $8.9 billion in 2016.\u00a0 Advances will be driven by a rebound in\u00a0building construction expenditures from","og_url":"https:\/\/insulation.org\/io\/articles\/gazing-into-the-crystal-ball-2012\/","og_site_name":"Insulation Outlook Magazine","article_modified_time":"2024-03-05T22:58:30+00:00","twitter_card":"summary_large_image","twitter_misc":{"Est. reading time":"8 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/insulation.org\/io\/articles\/gazing-into-the-crystal-ball-2012\/","url":"https:\/\/insulation.org\/io\/articles\/gazing-into-the-crystal-ball-2012\/","name":"Gazing into the Crystal Ball 2012 - Insulation Outlook Magazine","isPartOf":{"@id":"https:\/\/insulation.org\/io\/#website"},"datePublished":"2012-04-01T00:00:00+00:00","dateModified":"2024-03-05T22:58:30+00:00","breadcrumb":{"@id":"https:\/\/insulation.org\/io\/articles\/gazing-into-the-crystal-ball-2012\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/insulation.org\/io\/articles\/gazing-into-the-crystal-ball-2012\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/insulation.org\/io\/articles\/gazing-into-the-crystal-ball-2012\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/insulation.org\/io\/"},{"@type":"ListItem","position":2,"name":"Gazing into the Crystal Ball 2012"}]},{"@type":"WebSite","@id":"https:\/\/insulation.org\/io\/#website","url":"https:\/\/insulation.org\/io\/","name":"Insulation Outlook Magazine","description":"The only global magazine dedicated to insulation.","publisher":{"@id":"https:\/\/insulation.org\/io\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/insulation.org\/io\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/insulation.org\/io\/#organization","name":"National Insulation Association","url":"https:\/\/insulation.org\/io\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/insulation.org\/io\/#\/schema\/logo\/image\/","url":"https:\/\/insulation.org\/io\/wp-content\/uploads\/sites\/3\/2016\/10\/insulation-outlook-logo.png","contentUrl":"https:\/\/insulation.org\/io\/wp-content\/uploads\/sites\/3\/2016\/10\/insulation-outlook-logo.png","width":229,"height":90,"caption":"National Insulation Association"},"image":{"@id":"https:\/\/insulation.org\/io\/#\/schema\/logo\/image\/"}}]}},"_links":{"self":[{"href":"https:\/\/insulation.org\/io\/wp-json\/wp\/v2\/articles\/6957","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/insulation.org\/io\/wp-json\/wp\/v2\/articles"}],"about":[{"href":"https:\/\/insulation.org\/io\/wp-json\/wp\/v2\/types\/articles"}],"wp:attachment":[{"href":"https:\/\/insulation.org\/io\/wp-json\/wp\/v2\/media?parent=6957"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/insulation.org\/io\/wp-json\/wp\/v2\/categories?post=6957"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/insulation.org\/io\/wp-json\/wp\/v2\/author?post=6957"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}