ConstructConnect announced today the release of its Q3 2017 Forecast Quarterly Report. The U.S. grand total construction starts growth projection for 2017 over 2016 in ConstructConnect’s Q3 report has been revised down slightly to +4.5% from +4.8%. 2018 remains about the same at +5.9% year over year (y/y). Earlier, it had been estimated at +6.0%.
“The outlook for U.S. construction starts, as calculated by ConstructConnect, has diminished slightly in the short term,” said to Chief Economist Alex Carrick. “Prospects for some private sector project initiations (e.g., in retail) have stalled, while high hopes for an early launch of a much-needed super-infrastructure program, to be sponsored, promoted and perhaps largely financed by the new administration in Washington, have been deflated.”
The forecast which combines ConstructConnect's proprietary data with macroeconomic factors and Oxford Economics econometric expertise, shows the type-of-structure sub-categories among non-residential building starts that will have banner years in 2017:
- Hotels/motels (+38.2%)
- Warehouses (+16.3%)
- Sports stadiums (+47.3%)
- Courthouses (+110.0%)
The 2017 forecast for non-residential building starts was adjusted to -0.8% y/y, versus a flat (0.0%) performance that was expected in Q2’s forecast report. According to the forecast, non-residential building starts in 2018 will rebound to +3.3%, with private office buildings and industrial/manufacturing doing better with less downward drag being exerted by retail and medical projects. The boom in hotel/motel work will begin to lose steam.
Based on a heightened record of ‘actual’ starts through the first half of this year (+25.2%), civil/engineering starts in 2017 were revised upwards to +16.5% y/y from +8.9% in Q2’s report. 2018 growth in this category has also been raised, to +7.4% (from +5.8%).
The forecast includes a few notable high points in the 2017 y/y engineering sub-categories:
- Airports (+38.0%)
- Roads (+14.0%)
- Bridges (+31.0%)
- Power/oil and gas (+30.8%)
The report states among major sub-sectors, residential construction’s 2017 y/y increase has been scaled down to +4.8% from +8.1%. The robust multi-family market of the last several years has been pulling back of late, as rental rates in many regions soared. Single-family starts also stalled, despite a need for substantial growth activity, since they declined so horrendously in the Great Recession. Also, new family formations, specifically among millennials, point to a tremendous potential that for the moment is not being realized.
Related Stories
Market Data | May 29, 2020
House-passed bill making needed improvements to paycheck protection program will allow construction firms to save more jobs
Construction official urges senate and White House to quickly pass and sign into law the Paycheck Protection Program Flexibility Act.
Market Data | May 29, 2020
7 must reads for the AEC industry today: May 29, 2020
Using lighting IoT data to inform a safer office reentry strategy and Ghafari joins forces with Eview 360.
Market Data | May 27, 2020
5 must reads for the AEC industry today: May 28, 2020
Biophilic design on the High Line and the office market could be a COVID-19 casualty.
Market Data | May 27, 2020
6 must reads for the AEC industry today: May 27, 2020
AIA's COTE Top Ten Awards and OSHA now requires employers to track COVID-19 cases.
Market Data | May 26, 2020
6 must reads for the AEC industry today: May 26, 2020
Apple's new Austin hotel and is CLT really a green solution?
Market Data | May 21, 2020
7 must reads for the AEC industry today: May 21, 2020
'Creepy' tech invades post-pandemic offices, and meet the new darling of commercial real estate.
Market Data | May 20, 2020
6 must reads for the AEC industry today: May 20, 2020
A wave 'inside' a South Korean building and architecture billings continues historic contraction.
Market Data | May 20, 2020
Architecture billings continue historic contraction
AIA’s Architecture Billings Index (ABI) score of 29.5 for April reflects a decrease in design services provided by U.S. architecture firms.
Market Data | May 19, 2020
5 must reads for the AEC industry today: May 19, 2020
Clemson's new mass timber building and empty hotels as an answer for the affordable housing shortage.
Market Data | May 18, 2020
5 must reads for the AEC industry today: May 18, 2020
California's grid can support all-electric buildings and you'll miss your office when it's gone.