Microsoft Word peachtree case study
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| Construction Industry The general construction industry is fragmented, with smaller operations collectively dominating. There area number of large players with nationwide coverage. Many smaller companies manage to survive in this competitive market due to the localized, specialized nature of their operations. The construction sector is highly dependent on both local and national economic conditions. The residential construction industry is acutely dependent upon mortgage rates. The US. construction and engineering industry generated total revenues of $479.3 billion in 2005, representing an Increase of 6.1 percent on the previous year’s value and a compound annual growth rate (CAGR) of 1.2 percent between 2001 and 2005. The construction and engineering industry in the United States currently generates 82.4 percent of total industry value for the Americas. This percentage share has declined slightly over the past five years, down from an industry share of 84 percent in 2001. However, the US. industry is predicted to recover slightly, reaching a share of 83 percent in 2010. The US. industry is mature and becoming saturated. The US. industry is facing significant cost Increases. Labor costs have also increased in recent years, a problem that will be compounded as the baby boomers reach retirement, as the supply of laborers declines, the upward pressure on wages will Increase. Following a robust gain of 11 percent in 2004, total domestic construction increased 9.2 percent in 2005, in nominal terms. Total construction is expected to decelerate to 6.9 percent, in 2006, followed by a mild three‐year downturn. Total construction grew 8.3 percent in the first quarter of 2006, with spending on residential construction rising a modest 0.7 percent and nonresidential construction growing 2.7 percent. This trend is expected to continue, with nonresidential investment exceeding residential investment into the fourth quarter of 2007, a reversal not witnessed for several years. Page 51 of 141 Overall, 2006 will be a strong year for commercial activity but a slightly weaker year for overall construction, as the booming housing market decelerates and home prices transition to a relatively soft landing. Rising interest rates will dampen the red‐hot housing market in 2006, but overall construction will remain strong, supported by robust nonresidential construction. An Increase in commercial and public construction will spur nonresidential growth throughout 2006. Improving budget outlooks allowed state and local governments to spend more freely in 2005. About 90 percent of public construction spending comes from state and local governments. Even with climbing fuel prices, rising interest rates and many businesses looking to cut costs, investment growth is giving the manufacturing sector an extra boost this year. Manufacturing output is expected to increase nearly 5.0 percent, and a primary recipient will be the machinery sector. Manufacturing was a main driver of nonresidential construction in 2005, and it will be even stronger this year. However, while manufacturing construction will remain at a healthy level in 2007‐08, growth is expected to slow. Download 0.84 Mb. Share with your friends:
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