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%.
Related Stories
Market Data | Mar 24, 2017
These are the most and least innovative states for 2017
Connecticut, Virginia, and Maryland are all in the top 10 most innovative states, but none of them were able to claim the number one spot.
Market Data | Mar 22, 2017
After a strong year, construction industry anxious about Washington’s proposed policy shifts
Impacts on labor and materials costs at issue, according to latest JLL report.
Market Data | Mar 22, 2017
Architecture Billings Index rebounds into positive territory
Business conditions projected to solidify moving into the spring and summer.
Market Data | Mar 15, 2017
ABC's Construction Backlog Indicator fell to end 2016
Contractors in each segment surveyed all saw lower backlog during the fourth quarter, with firms in the heavy industrial segment experiencing the largest drop.
Market Data | Feb 28, 2017
Leopardo’s 2017 Construction Economics Report shows year-over-year construction spending increase of 4.2%
The pace of growth was slower than in 2015, however.
Market Data | Feb 23, 2017
Entering 2017, architecture billings slip modestly
Despite minor slowdown in overall billings, commercial/ industrial and institutional sectors post strongest gains in over 12 months.
Market Data | Feb 16, 2017
How does your hospital stack up? Grumman/Butkus Associates 2016 Hospital Benchmarking Survey
Report examines electricity, fossil fuel, water/sewer, and carbon footprint.
Market Data | Feb 1, 2017
Nonresidential spending falters slightly to end 2016
Nonresidential spending decreased from $713.1 billion in November to $708.2 billion in December.
Market Data | Jan 31, 2017
AIA foresees nonres building spending increasing, but at a slower pace than in 2016
Expects another double-digit growth year for office construction, but a more modest uptick for health-related building.
High-rise Construction | Jan 23, 2017
Growth spurt: A record-breaking 128 buildings of 200 meters or taller were completed in 2016
This marks the third consecutive record-breaking year for building completions over 200 meters.