Reed Expansion Index predicts widespread economic improvement for the year

Reed Construction Data announced its December Expansion Index stood at 1.48, indicating overall construction in the United States is expected to grow over the next 12 months.

“The positive signs of growth are encouraging and align with other economic data,” said Bernard Markstein, U.S. Chief Economist, Reed Construction Data. “With an Expansion Index greater than 1 in 41 states plus the District of Columbia, the expected improvement in construction appears widespread across the country.” The top five states expected to see an expanding construction market: North Dakota, Rhode Island, Montana, Virginia, Utah.

The Expansion Index is a monthly measure of expectations for the construction marketplace over the upcoming 12-18 months, based on the value of projects in the planning pipeline. A reading greater than 1 indicates construction volume is expected to expand.

In addition to an overall measure of U.S. construction, Reed uses the Expansion Index to track expected construction volume for every state and more than 360 Metropolitan Statistical Areas.

According to Markstein, multiple factors are supporting the positive signal.

“Many pieces are falling into place for a moderately faster-growing economy,” stated Markstein. “Companies are experiencing rising demand. A federal budget deal was signed into law. Residential construction continues to improve. Europe is slowly working its way out of recession. These and other positives mean the Reed Expansion Index is likely to remain well above 1 for several months–an indication that construction activity will rise throughout the year.”

The Expansion Index is a ratio of the value of projects in the planning phase over the value of the projects estimated to be still under construction in a defined geography and/or building segment. The relationship says if more in the pipeline than underway, the volume will increase in the future if that ratio is greater than 1. The data covered includes non-residential and multifamily residential construction.

To view the Expansion Index, visit www.reedconstructiondata.com/market-intelligence/expansion-index.

About Reed Construction Data

Reed Construction Data is a trusted source for detailed, accurate, and up-to-date information on private and public construction projects across the United States and Canada. Reed’s data collection teams leverage strong industry relationships, innovative technology, and third-party data sources to deliver timely and accurate information on projects, companies, and contacts and daily updates for all types of general and civil construction. For more information, visit www.reedconstructiondata.com.