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 | Nov 29, 2016
It’s not just traditional infrastructure that requires investment
A national survey finds strong support for essential community buildings.
Industry Research | Nov 28, 2016
Building America: The Merit Shop Scorecard
ABC releases state rankings on policies affecting construction industry.
Multifamily Housing | Nov 28, 2016
Axiometrics predicts apartment deliveries will peak by mid 2017
New York is projected to lead the nation next year, thanks to construction delays in 2016
Market Data | Nov 22, 2016
Construction activity will slow next year: JLL
Risk, labor, and technology are impacting what gets built.
Market Data | Nov 17, 2016
Architecture Billings Index rebounds after two down months
Decline in new design contracts suggests volatility in design activity to persist.
Market Data | Nov 11, 2016
Brand marketing: Why the B2B world needs to embrace consumers
The relevance of brand recognition has always been debatable in the B2B universe. With notable exceptions like BASF, few manufacturers or industry groups see value in generating top-of-mind awareness for their products and services with consumers.
Industry Research | Nov 8, 2016
Austin, Texas wins ‘Top City’ in the Emerging Trends in Real Estate outlook
Austin was followed on the list by Dallas/Fort Worth, Texas and Portland, Ore.
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.
Market Data | Oct 28, 2016
U.S. construction solid and stable in Q3 of 2016; Presidential election seen as influence on industry for 2017
Rider Levett Bucknall’s Third Quarter 2016 USA Construction Cost Report puts the complete spectrum of construction sectors and markets in perspective as it assesses the current state of the industry.
