|
McGraw-Hill's Norbert Young Bullish on U.S. Construction Industry
Despite globalization, the United States will remain the top market for the construction industry for the foreseeable future.
Norbert Young, FAIA, president of McGraw-Hill Construction, paid a visit to EDAW’s Alexandria, Virginia, offices earlier this month to relay some decidedly upbeat news to the ASLA Executive Committee about the future of the construction industry, and the future of landscape architecture. The crux of Young’s talk was that the construction industry as a whole continues to experience growth, and that the United States will be the center of that growth for the foreseeable future. He also noted that sustainability and green building trends are here to stay and that landscape architects should be poised to take full advantage of green building trends due to their early and ongoing leadership on sustainability issues.
The stats
Young began his presentation by peppering the executive committee with statistics to help frame the size and dimensions of the construction industry. He noted that global construction and its players make up a $5 trillion industry, putting it in select company. “There are only two or three trillion-dollar industries in the world,” Young said, “and we are one of them.” That price tag is set to go up, as Young noted that the construction industry is the second-largest growth industry in the United States, behind the health-care industry. He also noted that 54 percent of the industry is concentrated in the residential market, with 28 percent falling in commercial, and 18 percent accounting for infrastructure.
Howver, Young also said that while the construction industry is massive, it is primarily made up of much smaller parts. He noted that 98 percent of the companies that make up the industry in the United States have 50 employees or less, and that the average life of a subcontractor is only 2.8 years. These numbers, combined with the fact that there are currently 44,000 individual building codes across the country, mean that the global construction business is, paradoxically, incredibly localized.
The productivity gap
The growth of the construction industry has, Young said, created a large productivity gap in the construction industry. He noted that despite the huge growth in business, the industry is collectively less productive now than it was in 1969. One of the main culprits for this gap, he said, is that the industry is not well connected with new technology. “The industry does not really do any research and development,” Young noted.
He also said the productivity gap is largely driven by a lack of new workers coming into the industry. Young urged the executive committee and by extension the ASLA membership at large, to reach out to young people—particularly high school students—and educate them about the opportunities the industry offers. He praised ASLA for its increased involvement with the ACE Mentor Program, which seeks to give high school students real-world experience in the industry through office visits and project work.
Globalization right here at home
Although there has been much talk about the effects of globalization, Young said there is, and will continue to be, a dominant market for the construction industry, and it is right here in the United States. Of the top 55 countries for construction, he noted, the United States accounts for 28 percent of the market, a fact that is not likely to change any time soon, even with the rise of India and China. In fact, China is not predicted to match the United States in terms of gross domestic product until 2030, and even then it will not be close to this country when it comes to GDP on a per capita basis.
However, Young cautioned that China will continue to be a market to be reckoned with. To date, there are 21 cities in China with a population greater than five million, compared with three—New York, Chicago, and Los Angeles—in the United States. “China has massive density and urbanization is the only way they are going to survive,” Young said. “They are actively engaged in recruiting U.S. talent in planning and development.”
But he noted that globalization is a two-way street, and China is currently making inroads into the U.S. market. Young said there are at least two Chinese companies currently operating in the United States. He said that these companies are “putting equity” into the country by purchasing existing firms, and he expects this trend to continue.
Sustainability “a fact of life”
Finally, Young said that green building and sustainability trends in the construction industry were “a fact of life,” and that the building industry needed to embrace green building technology in order to stay competitive.
“Your profession, as advocates for the environment, has embraced this notion sooner than anyone,” Young said. “I’m a card-carrying member of the AIA, and I’m here to tell you, there are still some of our members who just don’t get it.”
Young urged builders to embrace Leadership in Energy and Environmental Design (LEED) standards, which he said weren’t perfect, but provided a good benchmark for measurable sustainability. He said other groups, like ASLA, should continue to add to the LEED standards through programs like the Systems Integration Tool for Environmentally Sustainable Sites (SITESS), which seeks to apply a sustainability rating system to landscapes. He said clients do perceive an advantage to using green building technology, particularly when it comes to saving money on energy costs. He said clients now recognize that energy savings over the long term often offset the initial cost of using sustainable building methods.
For an interview with Norbert Young on the future of the construction industry, listen to this month’s LAND Online podcast.
|
|
