In its latest quarterly survey of U.S. construction costs, international property and construction cost-consultant firm Rider Levett Bucknall (RLB) reports that construction spending in the United States is on track to increase approximately 6% in 2016. Overall, the national average increase in construction costs for the quarter was approximately 1.5%.
Julian Anderson, President of RLB North America, said, “In our new report, we see continued positive news for the health of the construction industry, a slight uptick in the rate cost escalation, and a sharp decrease in the rate of construction unemployment. Looking ahead, barring a Democratic sweep of the Presidency and Congress, we do not see any big, near-term changes in either private- sector or public-sector construction activity.”
While current spending is falling short of the 20% growth seen by select segments of the industry in 2015, the outlook for the construction field as a whole is reasonably favorable. Continued low interest rates, rising consumer confidence, and healthy job growth also contribute to the guarded optimism.
Going forward, RLB sees a 5% expansion in construction spending for 2017. Based on a recent consensus forecast by the Urban Land Institute, the firm notes that past gains in activity may start to slow, suggesting the latter stages of a real estate cycle. National economic growth has been slower than previously anticipated, in part due to increasing national and international vulnerabilities. Combined with weakened domestic manufacturing output and investor uncertainty pending the results of the U.S. presidential election, these conditions may begin to create downward pressure on the construction industry in 2017.
About the Rider Levett Bucknall Quarterly Construction Cost Report
Rider Levett Bucknall reports on the comparative costs of construction in 12 U.S. cities on a quarterly basis, indexing them to show how costs are changing in each city, as well as against the costs of the other 11 locations. Together with additional international and national cost compendia, the cost research equips clients with complete and relevant information to assist in business decisions.
Related Stories
Market Data | Nov 2, 2016
Nonresidential construction spending down in September, but August data upwardly revised
The government revised the August nonresidential construction spending estimate from $686.6 billion to $696.6 billion.
Market Data | Oct 31, 2016
Nonresidential fixed investment expands again during solid third quarter
The acceleration in real GDP growth was driven by a combination of factors, including an upturn in exports, a smaller decrease in state and local government spending and an upturn in federal government spending, says ABC Chief Economist Anirban Basu.
Industry Research | Oct 25, 2016
New HOK/CoreNet Global report explores impact of coworking on corporate real rstate
“Although coworking space makes up less than one percent of the world’s office space, it represents an important workforce trend and highlights the strong desire of today’s employees to have workplace choices, community and flexibility,” says Kay Sargent, Director of WorkPlace at HOK.
Market Data | Oct 24, 2016
New construction starts in 2017 to increase 5% to $713 billion
Dodge Outlook Report predicts moderate growth for most project types – single family housing, commercial and institutional building, and public works, while multifamily housing levels off and electric utilities/gas plants decline.
High-rise Construction | Oct 21, 2016
The world’s 100 tallest buildings: Which architects have designed the most?
Two firms stand well above the others when it comes to the number of tall buildings they have designed.
Market Data | Oct 19, 2016
Architecture Billings Index slips consecutive months for first time since 2012
“This recent backslide should act as a warning signal,” said AIA Chief Economist, Kermit Baker.
Market Data | Oct 11, 2016
Building design revenue topped $28 billion in 2015
Growing profitability at architecture firms has led to reinvestment and expansion
Market Data | Oct 4, 2016
Nonresidential spending slips in August
Public sector spending is declining faster than the private sector.
Industry Research | Oct 3, 2016
Structure Tone survey shows cost is still a major barrier to building green
Climate change, resilience and wellness are also growing concerns.
Industry Research | Sep 27, 2016
Sterling Risk Sentiment Index indicates risk exposure perception remains stable in construction industry
Nearly half (45%) of those polled say election year uncertainty has a negative effect on risk perception in the construction market.
