ConstructConnect, a leading provider of construction information and technology solutions in North America, released 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 percent or more,” explained Chief Economist Alex Carrick. “Non-residential building will disappoint, with gains of only about +2.0 percent 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 percent.
• Warehouses, +4.7 percent.
• Nursing homes, +5.9 percent.
• Educational facilities, +4.2 percent.
• Roads, +5.9 percent.
• Bridges, +10.2 percent.
• Miscellaneous civil (power, oil and gas), +13.8 percent.
2017 total starts are now expected to be +7.9 percent (versus an earlier calculated +4.5 percent). Residential has been upgraded to +10.1 percent and engineering/civil to +23.1 percent. Non-residential building has been left essentially flat at -0.5 percent.
For 2018, the new forecasts shave a bit off what was previously expected. Total starts are now projected to be +4.8 percent, a little slower than the +5.9 percent of a quarter ago. Residential will be +6.7 percent in 2018; non-res building, +1.9 percent; and heavy engineering/civil, +6.6 percent.
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