Real Estate & Construction Accounting Blog

• Building Information Modeling - Why Now?
• National Construction Industry Outlook
• Can Europe's Problems Slow Construction in the United States?

Building Information Modeling - Why Now?
by Donna L. Cahan, eBlueprint

As one of the most dominant trends impacting the Construction Industry, Building Information Modeling (BIM) is frequently discussed and debated among industry professionals.

While most of us clearly understand the potential of BIM - that adoption of the technology could definitively change current processes - there are many who are wondering what it means for us today. Questions like "What percent of the industry is already using BIM?," "How do I integrate with my back office processes?," and "How can BIM make a difference?," abound. After reading a recent post asking, once again, what percent of the industry has adopted BIM, I got to thinking about the subject and reached a few conclusions.

No one can state with any authority that a specific percent of the industry has already adopted BIM. The reason for this? The industry has not defined what it means to say "I've adopted BIM." The information that I read included everything from using a 3D design to review façade options, to the use of Revit® MEP, to design with Sketch-Up®, to a Microstation® object requirement from an owner - the list goes on and on and on.
No one can state with any authority the cost of integrating BIM within the industry, or within a specific type of business, or the cost if we don't.

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National Construction Industry Outlook

Like the national economy, the construction industry at mid-year is at a stage of moving somewhat laterally, trying to find a direction. Instead of having a clearer sense of the industry's health, there remains uncertainty about several key factors in the direction and trend for 2011.

At the end of June, the indicators of the health of the housing market were weakening. Always an indicator of the economy's direction, the housing market is even more important to the strength of this cycle's recovery than in previous cycles. Two key measurements - the sales of existing homes and the sales of new homes in May - were being anxiously anticipated to gauge how much of the early recovery in housing was sustainable once the $8,000 tax credit program expired. The provisions of the program required a contract by signed by April 30 so May's volume would be the first in eight months to show sales without the extra incentive.

The results were negative as expected; however, the degree to which the volume was seen as negative seemed to depend on how high your expectations were.

First, the results. Sales of single-family units, which are completed transactions that include single-family, townhomes, condominiums and co-ops, were at a seasonally adjusted annual rate of 5.66 million units in May, down 2.2 percent from an upwardly revised surge of 5.79 million units in April. May closings are 19.2 percent above the 4.75 million-unit level in May 2009. The decline from April seemed to catch many observers off guard, but NAR chief economist, Lawrence Yun sees the volume in May as elevated.

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Can Europe's Problems Slow Construction in the United States? 

There is an eerie similarity this summer to the summer of 2008. While the world's financial institutions have healed somewhat from the crisis of that fall, there remain some structural problems that haven't gone away. And like the summer of 2008, there is a financial issue that seems too small and complex to get so concerned about: sovereign debt.

In April, the world's stock exchanges discovered again what a relatively small amount of fear could do to investment and stock prices. On all American stock market indexes prices fell back over 10% in just a few weeks. For the better part of a month one country, Greece whose economy is small in comparison with the largest economies, dominated the financial headlines. Ironically, the markets had been hearing about Greece's debt problems for more than six months. During that time experts and heads of state assured us that the concerns were overblown, that Greece's problems were too small, and that even if the nation defaulted it would have little real effect other than unsettling still nervous investors.

Does any of this sound familiar? Remember the reassurances after Bear Stearns imploded? The scoffing at how small a share sub-prime mortgages were? How about the daily denials that (you fill in the blank here) had any liquidity problems?

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If you have any questions about any of these articles, post a comment below or please contact our Real Estate & Construction Group at 440-449-6800.