The brief downturn in the Multifamily-for-Rent market outlook is clearly over as PSMJ’s forward-looking proposal activity metric reached its highest level for the sector in nearly two years. Proposal activity in the 4th Quarter, as measured by PSMJ’s Net Plus/Minus Index, climbed to 58% in the 4th Quarter, up from 40% in the 3rd Quarter. This is the sector’s highest NPMI since it hit 76% in the 1st Quarter of 2018, according to PSMJ Resources’ Quarterly Market Forecast (QMF). Multifamily had plummeted to -2% and +7%, respectively, in the first two quarters of 2020, coming off a 4th Quarter 2019 NPMI of 54%. Its 1st Quarter 2020 performance was its lowest in almost a decade.
PSMJ Senior Principal David Burstein, PE, AECPM, noted that the turnaround in the Multifamily-for-Rent and Condominium markets are part of an overall upward trend for all Housing markets. “The significant turnaround in both of these multifamily markets are attributable to an increase in personal savings resulting from the government’s stimulus checks as well as significant movement of many people from cities to suburbs – which is shifting the location of the demand,” he said. “So we believe the Multifamily market will continue to be strong into the foreseeable future.”
PSMJ’s NPMI expresses the difference between the percentage of firms reporting an increase in proposal activity and those reporting a decrease. The QMF has proven to be a solid predictor of market health for the architecture and engineering (A/E) industry since its inception in 2003. A consistent group of over 300 A/E firm leaders participate regularly, with 132 contributing to the most recent survey.
The Condominium and Assisted/Independent Living markets also continued their rebound. Condos’ NPMI crept up to 15% from 11% in the 3rd Quarter, off dismal results in the 1st (-28%) and 2nd (-26%) quarters. The 4th Quarter performance for Condos was still off from the 22% it recorded in the 4th Quarter of 2019. Similarly, Assisted/Independent Living showed minor improvement in the 4th Quarter (up from 26% to 27%, quarter over quarter) and down from the 52% the survey reported for the sector a year ago. It was also negative in the 1st (-3%) and 2nd (-1%) quarters of 2020.
The two other Housing markets measured in the PSMJ survey also show long-term promise for design and construction activity, according to the QMF. Single-Family Homes (59%) and Single-Family Subdivisions (51%) both reached their highest NPMI since PSMJ began collecting survey data for submarkets in 2006.
Among the 12 major markets surveyed, Energy/Utilities unseated Housing with an NPMI of 47%, though Housing’s runner-up NPMI of 43% was an improvement from 38% in the 3rd Quarter. Water/Wastewater, another stand-out during COVID, slipped to 6th among the 12 markets measured. Its NPMI of 23% is down from 37% the prior quarter. Healthcare’s outlook remained steady at 35% (up from 30%), as did Light Industry (35%, up from 27%). Heavy Industry had the greatest gain, rocketing to 32% from 0% due to strong scores in Product Manufacturing (40%) and Pharmaceutical Production (35%).
Proposal activity for Education projects trailed again at -29%, though it improved from -37%. Commercial Users (-29%, up from -31%) and Commercial Developers (-13% up from -23%) rounded out the dozen.
PSMJ Resources, a consulting and publishing company dedicated to the A/E industry, has conducted its Quarterly Market Forecast for more than 17 years. It includes data on 12 major markets and 58 submarkets served by A/E firms. For more information, go to https://www.psmj.com/surveys/quarterly-market-forecast-2.
Related Stories
Market Data | Apr 30, 2020
5 must reads for the AEC industry today: April 30, 2020
College programs help prepare students for careers in the construction industry and a national movement to cancel May rent takes shape.
Market Data | Apr 30, 2020
The U.S. Hotel Construction pipeline continued to expand year-over-year despite COVID-19 in the first quarter of 2020
Many open or temporarily closed hotels have already begun or are in the planning stages of renovating and repositioning their assets while occupancy is low or non-existent.
Market Data | Apr 29, 2020
5 must reads for the AEC industry today: April 29, 2020
A new Human performance Center and Construction employment declines in 99 metro areas.
Market Data | Apr 29, 2020
Construction employment declines in 99 metro areas in March from 2019
Industry officials call for new state and federal funding to add jobs.
Market Data | Apr 28, 2020
5 must reads for the AEC industry today: April 28, 2020
A virtual 'city-forest' to help solve population density challenges and planning for life in cities after the pandemic.
Market Data | Apr 27, 2020
5 must reads for the AEC industry today: April 27, 2020
Colleges begin building campus eSports arenas and PCL Construction rolls out portable coronavirus testing centers.
Market Data | Apr 24, 2020
6 must reads for the AEC industry today: April 24, 2020
Take a virtual tour of Frank Lloyd Wright's Robie House and Construction Contractor Confidence plummets.
Market Data | Apr 23, 2020
Construction Contractor Confidence plummets in February
As of February 2020, fewer than 30% of contractors expected their sales to increase over the next six months.
Market Data | Apr 23, 2020
5 must reads for the AEC industry today: April 23, 2020
The death of the department store and how to return to work when the time comes.
Market Data | Apr 22, 2020
6 must reads for the AEC industry today: April 22, 2020
Repurposed containers can be used as rapid response airborne infection isolation rooms and virtual site visits help control infection on project sites.
