Pat Barcas photo
FMI Senior Consultant Mark “Rusty” Sherwood gave an in-depth, upbeat economic forecast at CISCO’s annual luncheon. He predicted positive growth — spurred by low inflation, a positive force in housing and the low cost of energy.

By Pat Barcas
Staff Writer
Thursday, April 25, 2013
     SCHAUMBURG — The future is bright, but Chicago contractors may not need to put on their shades just yet.
     Mark “Rusty” Sherwood, senior consultant with management consulting firm FMI, said the economy is moving in the right direction, but the population in the United States is trending toward the south and west.
     Sherwood delivered his 2013 economic forecast at the Construction Industry Service Corporation’s 25th anniversary luncheon April 19, and he said multi-family home construction is going to be big in 2013.
     Sherwood said there is lots of positive growth in the industry, spurred by low inflation, a positive force in housing, and the low cost of energy like natural gas.
     He forecasts a growth of 3 percent in spending for the east-north central part of the country, with key areas being education, health care, and power. Roads and bridges are expected to dive about 4 percent.
     “In Chicago, commercial construction is going to be carrying most of the water, with institutional being next in line. That has a fair amount of long growth. Industrial growth will be modest,” he said. “From 2008-2011 it was downright tough out there, but growth will continue, driven through multi-family construction. The coffers are beginning to renew.”
     He said a major trend, or obstacle, that contractors have been working in is the buyer’s market.
     “This is a trend we’ve all been following. We’re dealing with customers who say, ‘you can do work for me, but it has to be better, faster, and cheaper.’ And we all know giving away business is not a successful strategy,” he said.
     The buyer’s market may soon be shifting long term due to an increasing number of jobs that are “megasized” in scope, and a shifting workforce. He said it’s important to zoom out and look at trends as well as demographics.
     “It’s important to look at demographics. Populations are shifting west and south. Labor shortages will return as baby boomers retire,” said Sherwood. “One in five among the current workforce is set to retire between 2012 and 2014. Smart companies are figuring out now how to motivate the millennial generation into the workforce. Unfortunately, construction continues to be an unattractive career option for people,” he said.
     The main acronym Sherwood wants contractors to know is VUCA — volatile, uncertain, complex and ambiguous.
     “It’s a VUCA world out there, and we have to adapt to survive,” he said.

Pat Barcas’ e-mail address is pat@foxvalleylabornews.com.