Happy New Year! I bet all of you are as thrilled as I am to put 2020 in the rearview mirror. I am always in awe of this time of year because of the endless possibilities that lie ahead.
This past year has been filled with ups and downs, and lots of uncertainty. When the COVID-19 pandemic hit the U.S., the engineering and construction industry lost $60.9 billion in GDP, and total jobs decreased to roughly 6.5 million, effectively wiping out two years of GDP gains and four years of job gains in months, according to the Bureau of Economic Analysis.
Since then, construction spending has been gradually recovering, as shown by the Associated Builders and Contractors’ Construction Confidence Index (CCI), which had plummeted to 38.1 in March — the first time the number has ever fallen below 50 in the history of the series. And, according to Deloitte’s recently released 2021 Engineering and Construction Industry Outlook report, 68% of engineering and construction executives surveyed in a post-election poll characterize the business outlook for their industry as somewhat or very positive.
Per the report, 2021 will present various challenges for engineering and construction companies.
“Smaller engineering and construction firms with less balanced portfolios or a higher exposure to energy, travel, hospitality or recreation end markets are likely to experience greater volatility in the coming year,” notes Michelle Meisels, principal, engineering and construction leader for Deloitte Consulting and author of the report. “Larger engineering and construction firms with more diversified exposure may absorb this impact better. While the residential segment is expected to recover through 2021, overall spending growth in 2021 will likely be led by an uptick in public, infrastructure, and commercial building starts and related investments. In fact, in a Deloitte post-election poll, 70% of engineering and construction leaders agree that new infrastructure projects, if fully approved, can help jump-start the economy.”
The report also cites incorporating more digital technologies as a way to ensure future success in the industry. In another Deloitte post-election poll, 76% of engineering and construction executives said they are likely to invest in at least one digital technology in 2021.
Additionally, the Propane Education & Research Council (PERC) is forecasting three specific commercial building trends that will see significant growth in 2021, including the need for on-demand water heating, energy efficient retrofits and the integration of CHP systems.
“At their core, all of these trends come back to the need for clean, efficient and resilient energy sources, such as propane,” says Bryan Cordill, director of residential and commercial business development at PERC. “Propane provides key benefits to both the builder and the building owner or operator, including the ability to meet economic, environmental, and efficiency goals in their projects.”
For more about what to expect in the coming year — including more market trends — check out what some of our industry experts have to say. In the meantime, I wish you all a happy, healthy and prosperous new year!