ConstructConnect revises U.S. 2017 total construction starts projection slightly downward
Adjusted rate for 2017 is 4.5 percent growth; 2018 growth is revised to 5.9 percent.
ConstructConnect’s quarterly report shows courthouses and sports stadiums to end 2017 with a flourish
ConstructConnect, a leading provider of construction information and technology solutions in North America, 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,” according 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.
ConstructConnect is a leading provider of construction information and technology solutions in North America. Through the combination of its four legacy brands (iSqFt, Construction Market Data, BidClerk and Construction Data), ConstructConnect brings project participants together with the most complete, accurate and actionable construction data and tools to drive success in national, regional and local markets. For more information, visit www.constructconnect.com.
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