“The Growing World of Design-Build,” a new white paper from FMI Corp. built environment researcher Paul Trombitas, tracks nonresidential project delivery trends over the past 25 years, and sees the design-build method accounting for 44 percent, or nearly $1.2 trillion, of related construction spending in the 2018-2021 window.
|The paper is posted at www.fminet.com.|
“Design-build is being used by both private and public sector owners as a way to keep projects moving forward, on time and within budget—and all with as little friction as possible,” he observes. “Of the various customer segments that use design-build, manufacturing, highway/street and education will represent the greatest percentage of [such] construction spending over the next three years. In our research, owners identified ‘delivery schedule’ as the greatest decision factor, followed by their own goals and objectives, both of which are highly influential in project delivery method selection.”
While design-bid-build has traditionally been the go-to delivery method, he adds, owner and project demands have changed and driven the use of alternatives based on specific project factors. The design-build alternative has proved especially suited to larger and more complex projects, where proponents have greater opportunity to advance cost-saving innovations, but is also seeing traction in contracts below $25 million.
“A sustained emphasis toward educating owners and project stakeholders on the process and benefits associated with design-build has facilitated continued adoption and greater utilization industry wide,” Trombitas concludes. “On the public side, increased design-build legislation has further helped push the adoption of such projects. On the private side, owners tend to select design-build for unique and challenging projects that require lots of collaboration.”
CONTRACTOR HEADCOUNT UP 4 POINTS
An Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics data indicates construction employment increased 280,000 in 2018, a 4.0 percent gain from prior-year levels. The analysis also showed industry unemployment rising to 5.1 percent during December, due to a meaningful increase in labor force participation, yet remained 0.8 percent lower than at the same time in 2017.
“For several reasons, such as market volatility, a sense of deep concern has set in recently among many economic stakeholders,” says ABC Chief Economist Anirban Basu. “There has also been some evidence of economic slowing, including in America’s manufacturing sector. But [the BLS] employment release reminds us that the U.S. economy continues to expand and that many businesses, including construction firms, remain in growth mode.
“What’s more, a stronger labor market continues to translate into solid wage gains for households. That will help keep the consumer portion of the economy strong, even as slower global economic growth creates more challenges for certain types of businesses. While overall U.S. economic growth is likely to slow in 2019, the economy appears poised to generate enough growth to keep the average contractor busy and backlog relatively stable.”