Dodge Data & Analytics released its 2018 Dodge Construction Outlook earlier this month, which predicts construction starts in 2018 will rise three percent to $765 billion.
Dodge Data & Analytics chief economist Robert Murray presented the findings at the 79th annual Dodge Construction Outlook Executive Conference last weekend in Chicago.
According to its website, Dodge Data & Analytics is North America’s leading provider of analytics and software-based workflow integration solutions for the construction industry.
“The U.S. construction industry has moved into a mature stage of expansion,” Murray said, via a press release. “After rising 11 percent to 13 percent per year from 2012 through 2015, total construction starts advanced a more subdued 5 percent in 2016. An important question entering 2017 was whether the construction industry had the potential for further expansion.
“Several project types, including multifamily housing and hotels, have pulled back from their 2016 levels, but the current year has seen continued growth by single-family housing, office buildings and warehouses. In addition, the institutional segment of nonresidential building has been quite strong, led especially by transportation terminal projects in combination with gains for schools and healthcare facilities.”
Via the NRCA, expectations released in the 2018 Dodge Construction Outlook include:
- Single-family housing climbing 9 percent in dollars and 7 percent in the number of units
- Multifamily housing decreasing 8 percent in dollars and 11 percent in units
- Commercial buildings increasing 2 percent
- Institutional buildings increasing 3 percent
- Manufacturing plant construction decreasing 1 percent
- Public works construction increasing 3 percent
- Electric utility construction dropping 13 percent
“For 2018, there are several positive factors which suggest that the construction expansion has further room to proceed,” Murray said. “The U.S. economy next year is anticipated to see moderate job growth. Long-term interest rates may see some upward movement but not substantially.
“While market fundamentals for commercial real estate won’t be quite as strong as this year, funding support for construction will continue to come from state and local bond measures. Two areas of uncertainty relate to whether tax reform and a federal infrastructure program get passed, with their potential to lift investment.
“Overall, the year 2018 is likely to show some construction project types register gains while other project types settle back, with the end result being a 3 percent increase for total construction starts.”
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