The health care sector showed surprising strength in a year that held too few surprises for most Midwest builders.
In 2012, health care providers were said to have shelved large building initiatives until the full effects of health care reform were known. Instead, many in the Midwest broke ground on major projects.
“It's unusual and may be a sign that providers are working harder to attract privately insured patients, now that reimbursements from Medicare and Medicaid are being squeezed,” says Anirban Basu, chief economist with Washington, D.C.-based Associated Builders and Contractors.
In other sectors, it was business—or lack of it—as usual. While single and multifamily housing is beginning to rev the engines of other regions, activity hasn't accelerated in the Midwest due to stagnant population growth and disincentives that have kept businesses from relocating there, says Ken Simonson, chief economist with Arlington, Va.-based Associated General Contractors of America.
A hike in state income taxes is just a sign of the taxing times that continue to dog Illinois, where Basu says another recession could be looming. “Recoveries in Illinois and Wisconsin continue to be among the slowest in the nation,” he says.
One bright spot is the Illinois Tollway's $12-billion Move Illinois program, which ramps up this year. Likewise, ongoing work on an extension of Interstate 69 is keeping Indiana roadbuilders busy. Indiana also is home to the largest project to break ground in the region last year: the Ohio River Bridges Project's $763-million East End Crossing. After years of false starts, the project finally is a go.