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%.