Whitepaper: 01.17.2012

2012 Outlook

— Kevin Kuntz, President, Southeast Division

McCarthy Southeast President Kevin Kuntz gives his take on what’s ahead for Georgia construction in 2012.
by Kevin W. Kuntz, McCarthy President, Southeast Division

As 2011 appears in the rearview mirror and we look ahead at what’s in store for 2012, we find ourselves asking once again, “Is 2012 going to be any better?”

Similar to past years, I think there is good news and bad news for our industry in 2012. From the data I’ve reviewed and from discussions with our owners and partners, I don’t think we will experience a big uptick in business growth in 2012; however, there are several positive indicators that we’re hanging our hardhats on moving forward and out of this recession.  

The single most positive indicator I see is that despite the still stagnant economy and the continuing gridlock in Washington, D.C., our owners are finally moving forward on projects that have been on hold since 2007. The healthcare, science and technology, and higher education markets seem to be recovering, and our owners feel confident enough to make significant investments in their facilities again. This is huge forward movement, and I think specifically the Atlanta region as a whole will see more projects break ground by the end of 2012 than we have since 2007, the start of the recession.

Our higher education customers have pent-up demand for projects, but due to declining state revenue in recent years, I anticipate this market will likely remain static in 2012. As Georgia’s revenues increase - indicators are that 2012 revenues will be higher than 2011 - watch for more big projects coming out of this market.

Many market sectors stopped building over the past three years, but the demands for new facilities, renovations and new technology are growing as we use up our existing infrastructure. The reports and “look aheads” I’ve read say we all have to continue to be smarter in how we spend our money because there is less of it to go around. That is probably true, but we live and work in a very entrepreneurial state that has to compete globally; to do that, we have to invest in critical infrastructure. Labor is not getting cheaper, steel and lumber have already hit their lows, and now is the time to invest. Georgia still needs transportation and energy investment, hospitals, educational and institutional facilities, places for people to live and work, and world-class research facilities. From what I’ve seen, our clients realize this and are tentatively dipping their toes in the water and moving forward on long-delayed projects.

It is my great hope that as I write this same article in 2013, we will have turned the corner for good, and there will be more work around than we as an industry can build, design and engineer. If that’s not quite the case, I do believe 2012 will be a better year for the AEC industry, the best since 2007.

I wish all of you a happy, healthy and prosperous 2012.

About the Author
Kevin W. Kuntz is president of the Southeast Division of McCarthy Building Companies, Inc. A 34-year veteran of the construction industry, Kevin is responsible for overseeing all McCarthy activities in the Southeastern United States. He began in the industry working for his father’s general contracting firm as an iron worker and a carpenter. Upon joining McCarthy, he traveled around the country building healthcare and research facilities. Kuntz spent 13 years in St. Louis where he ran the operations for the firm’s Midwest Division before moving to Atlanta to start the Southeast Division. Kevin can be reached at kkuntz@mccarthy.com.

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