As we approach mid-year 2016, construction build experts project a conservative 6% increase (~$172B) in new construction starts for 2016. Following a 9% increase in 2014 and a windfall of 13% increase last year, projections for 2016 may not tell the full story. Electric power and gas verticals anticipate an approximate 43% downturn for 2016, both of which are non-building sectors. Eliminating electric power and gas verticals from total construction growth projections will further increase construction start growth to 10%.
A telling sign of the U.S. economy’s newfound stability is repeated growth in virtually all sectors of new construction starts. Robert Murray, chief economist for Dodge Data & Analytics shared,
“Total construction activity, as measured by the construction starts data, is on track this year to record the strongest annual gain so far in the current expansion, advancing 13%. Much of this year’s lift has come from nonbuilding construction, reflecting the start of several massive liquefied natural gas terminals in the Gulf Coast region, as well as renewed growth for new power plant starts.
Residential building, up 18% this year, has witnessed continued strength for multifamily housing while single family housing seems to have re-established an upward trend after its 2014 plateau…”
Closely evaluating both nonresidential and residential construction growth presents a clear picture of a more stabilized U.S. economy.
Forecast for Nonresidential Construction Starts in 2016
Nonresidential new construction starts are believed to grow by as much as 9% in 2016 according to Dodge Analytics. Forecasts by the Associated Builders and Contractors (ABC) are slightly more bearish on nonresidential construction with projections at 7.4%. Manufacturing (+14.9%) and lodging (+11.4%) lead sector predictions for nonresidential construction growth in 2016 with commercial (+3.7%) lagging far behind. Private nonresidential construction growth is projected at 8.8% compared to public nonresidential construction growth at only 5.5%.
Forecast for Residential Construction Starts in 2016
Single-family residential new construction starts are anticipated to increase as much as 20% in dollar value in 2016. This matches the 17% growth in single-family housing units to reach more than the 800,000 in 2016. A far more conservative rate of 7% in dollar value with a 5% total increase in units is projected for multiple-family housing. According to Dodge Data & Analytics, low vacancies, soaring rent rates and increase in apartment housing from millennials will increase growth into Q3 and Q4 2016. Construction employment reflects the surging growth in residential construction with a projected 3.2% increase compared to only a 2.6% for nonresidential.As construction growth booms as we get deeper into 2016, so will the demand for construction camera systems to monitor project progress. TrueLook equips project managers and contractors with 24/7 access and peace of mind. Click here to learn more about TrueLook.
How do these projections differ from what you’re experiencing?