Leopardo released its 2016 Construction Economics Report and Outlook, a guide to help business leaders, healthcare administrators and government decision-makers understand the factors that impact construction costs.
This year’s report shows that 2015 was a turning point for commercial real estate construction, as spending reached the highest level since the Great Recession and even the pace of growth accelerated more than in previous years.
By the end of 2015, total spending on U.S. construction grew 10.5% to $1.1 trillion, the largest year-over-year gain since 2007. The most dynamic growth was in the private sector, where construction spending expanded 12.3%, compared to just 5.6% growth in public-sector projects.
"With a steadily growing economy, low national vacancy rates and historically low interest rates, companies are seeing this period as the right time to expand or relocate their facilities to accommodate growth,” said Jim Leopardo, CEO of Leopardo. “We’re seeing healthy construction volume of nearly every property type, both nationally and in the Chicago area.”
Key findings in the report include:
- Multifamily construction has grown by 29.4% annually since 2011, driven by a movement of renters by choice in urban work-live-play areas. In the same period, single-family home construction increased 14.8% annually.
- Office construction spending grew by 22% in 2014, driven by job growth in the tech sector. This growth spurt is expected to scale back to an average 5.9% annual growth rate through 2019.
- Construction jobs grew 7.8% in the Chicago area, outpacing the national average of 4.2% in 2015. In 2014, Chicago’s 3.2% construction job growth lagged the national average of 5.7%.
Related Stories
Market Data | Jan 4, 2018
Nonresidential construction spending ticks higher in November, down year-over-year
Despite the month-over-month expansion, nonresidential spending fell 1.3 percent from November 2016.
Contractors | Jan 4, 2018
Construction spending in a ‘mature’ period of incremental growth
Labor shortages are spiking wages. Materials costs are rising, too.
Market Data | Dec 20, 2017
Architecture billings upturn shows broad strength
The American Institute of Architects (AIA) reported the November ABI score was 55.0, up from a score of 51.7 in the previous month.
Market Data | Dec 14, 2017
ABC chief economist predicts stable 2018 construction economy
There are risks to the 2018 outlook as a number of potential cost increases could come into play.
Market Data | Dec 13, 2017
Top world regions and markets in the global hotel construction pipeline
The top world region by project count is North America.
Market Data | Dec 11, 2017
Global hotel construction pipeline is growing
The Total Pipeline stands at 12,427 Projects/2,084,940 Rooms.
Market Data | Dec 11, 2017
Construction backlog surges, sets record in third quarter
CBI is a leading economic indicator that reflects the amount of construction work under contract, but not yet completed.
Market Data | Dec 7, 2017
Buoyed by healthy economy, ABC Index finds contractors upbeat
Despite rising construction labor and materials costs, 55% of contractors expect their profit margins to expand in the first half of 2018.
Market Data | Dec 5, 2017
Top health systems engaged in $21 billion of U.S. construction projects
Largest active projects are by Sutter Health, New York Presbyterian, and Scripps Health.
Industry Research | Nov 28, 2017
2018 outlook: Economists point to slowdown, AEC professionals say ‘no way’
Multifamily housing and senior living developments head the list of the hottest sectors heading into 2018, according a survey of 356 AEC professionals.
