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 | Jul 30, 2018
Nonresidential fixed investment surges in second quarter
Nonresidential fixed investment represented an especially important element of second quarter strength in the advance estimate.
Market Data | Jul 11, 2018
Construction material prices increase steadily in June
June represents the latest month associated with rapidly rising construction input prices.
Market Data | Jun 26, 2018
Yardi Matrix examines potential regional multifamily supply overload
Outsize development activity in some major metros could increase vacancy rates and stagnate rent growth.
Market Data | Jun 22, 2018
Multifamily market remains healthy – Can it be sustained?
New report says strong economic fundamentals outweigh headwinds.
Market Data | Jun 21, 2018
Architecture firm billings strengthen in May
Architecture Billings Index enters eighth straight month of solid growth.
Market Data | Jun 20, 2018
7% year-over-year growth in the global construction pipeline
There are 5,952 projects/1,115,288 rooms under construction, up 8% by projects YOY.
Market Data | Jun 19, 2018
ABC’s Construction Backlog Indicator remains elevated in first quarter of 2018
The CBI shows highlights by region, industry, and company size.
Market Data | Jun 19, 2018
America’s housing market still falls short of providing affordable shelter to many
The latest report from the Joint Center for Housing Studies laments the paucity of subsidies to relieve cost burdens of ownership and renting.
Market Data | Jun 18, 2018
AI is the path to maximum profitability for retail and FMCG firms
Leading retailers including Amazon, Alibaba, Lowe’s and Tesco are developing their own AI solutions for automation, analytics and robotics use cases.
Market Data | Jun 12, 2018
Yardi Matrix report details industrial sector's strength
E-commerce and biopharmaceutical companies seeking space stoke record performances across key indicators.