ConstructConnect, a provider of construction information and technology solutions in North America, recently announced the release of its Q4 2017 Forecast Quarterly Report. The Winter 2017-18 starts forecast includes year-over-year estimates for 2017 that have become more upbeat than a quarter ago. Groundbreakings on several mega projects late this year have provided exceptional lift to the industrial and engineering type-of-structure categories.
“Out to 2021, residential will be the main driver of total construction starts, recording year-over-year increases of nearly +6.0% or more,” explained Chief Economist Alex Carrick. “Non-residential building will disappoint, with gains of only about +2.0% each year. Engineering will be strong in 2018 and 2019, as energy initiatives and infrastructure work are promoted by Washington, but will then moderate in 2020-21.”
The forecast which combines ConstructConnect's proprietary data with macroeconomic factors and Oxford Economics econometric expertise, shows some of the more robust 2018 starts forecasts:
- Single-family residential, +8.8%
- Warehouses, +4.7%
- Nursing homes, +5.9%
- Educational facilities, +4.2%
- Roads, +5.9%
- Bridges, +10.2%
- Miscellaneous civil (power, oil and gas), +13.8%
2017 total starts are now expected to be +7.9% (versus an earlier calculated +4.5%). Residential has been upgraded to +10.1% and engineering/civil to +23.1%. Non-residential building has been left essentially flat at -0.5%.
For 2018, the new forecasts shave a bit off what was previously expected. Total starts are now projected to be +4.8%, a little slower than the +5.9% of a quarter ago. Residential will be +6.7% in 2018; non-res building, +1.9%; and heavy engineering/civil, +6.6%.
In residential construction, the multi-family market has had its turn and it will be the single-family market that will expand more rapidly moving forward, aided by family-formations among the millennial generation.
The forecast reports that educational facilities will grow faster than hospitals in 2018, but beginning in 2019 their positions will reverse. Some other non-residential building type-of-structure categories with bullish outlooks include: courthouses and prisons; warehouses; and nursing homes. Airports and sports stadiums will also be stepping into the construction spotlight.
The report noted a few ongoing economic trends:
- A synchronous world expansion is underway, with North America, Japan, China and Europe all experiencing GDP growth
- Based on demographics, housing starts have fallen short of potential for almost a decade
- Office space demand will increasingly come from firms engaged in high-tech
- Prices for many internationally traded commodities are on the mend
To learn more about ConstructConnect or get a free copy of the Forecast Quarterly Report, visit constructconnect.com.
Related Stories
Market Data | Apr 11, 2023
Construction crane count reaches all-time high in Q1 2023
Toronto, Seattle, Los Angeles, and Denver top the list of U.S/Canadian cities with the greatest number of fixed cranes on construction sites, according to Rider Levett Bucknall's RLB Crane Index for North America for Q1 2023.
Contractors | Apr 11, 2023
The average U.S. contractor has 8.7 months worth of construction work in the pipeline, as of March 2023
Associated Builders and Contractors reported that its Construction Backlog Indicator declined to 8.7 months in March, according to an ABC member survey conducted March 20 to April 3. The reading is 0.4 months higher than in March 2022.
Market Data | Apr 6, 2023
JLL’s 2023 Construction Outlook foresees growth tempered by cost increases
The easing of supply chain snags for some product categories, and the dispensing with global COVID measures, have returned the North American construction sector to a sense of normal. However, that return is proving to be complicated, with the construction industry remaining exceptionally busy at a time when labor and materials cost inflation continues to put pricing pressure on projects, leading to caution in anticipation of a possible downturn. That’s the prognosis of JLL’s just-released 2023 U.S. and Canada Construction Outlook.
Market Data | Apr 4, 2023
Nonresidential construction spending up 0.4% in February 2023
National nonresidential construction spending increased 0.4% in February, according to an Associated Builders and Contractors analysis of data published by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $982.2 billion for the month, up 16.8% from the previous year.
Multifamily Housing | Mar 24, 2023
Average size of new apartments dropped sharply in 2022
The average size of new apartments in 2022 dropped sharply in 2022, as tracked by RentCafe. Across the U.S., the average new apartment size was 887 sf, down 30 sf from 2021, which was the largest year-over-year decrease.
Multifamily Housing | Mar 14, 2023
Multifamily housing rent rates remain flat in February 2023
Multifamily housing asking rents remained the same for a second straight month in February 2023, at a national average rate of $1,702, according to the new National Multifamily Report from Yardi Matrix. As the economy continues to adjust in the post-pandemic period, year-over-year growth continued its ongoing decline.
Contractors | Mar 14, 2023
The average U.S. contractor has 9.2 months worth of construction work in the pipeline, as of February 2023
Associated Builders and Contractors reported today that its Construction Backlog Indicator increased to 9.2 months in February, according to an ABC member survey conducted Feb. 20 to March 6. The reading is 1.2 months higher than in February 2022.
Industry Research | Mar 9, 2023
Construction labor gap worsens amid more funding for new infrastructure, commercial projects
The U.S. construction industry needs to attract an estimated 546,000 additional workers on top of the normal pace of hiring in 2023 to meet demand for labor, according to a model developed by Associated Builders and Contractors. The construction industry averaged more than 390,000 job openings per month in 2022.
Market Data | Mar 7, 2023
AEC employees are staying with firms that invest in their brand
Hinge Marketing’s latest survey explores workers’ reasons for leaving, and offers strategies to keep them in the fold.
Multifamily Housing | Feb 21, 2023
Multifamily housing investors favoring properties in the Sun Belt
Multifamily housing investors are gravitating toward Sun Belt markets with strong job and population growth, according to new research from Yardi Matrix. Despite a sharp second-half slowdown, last year’s nationwide $187 billion transaction volume was the second-highest annual total ever.
