The AEC Lens Alex Carrick, Chief Economist at ConstructConnect
Alex Carrick is Chief Economist for ConstructConnect. He is a frequent contributor to the Daily Commercial News and the Journal of Commerce. He has delivered presentations throughout North America on the Canadian, United States and world construction outlooks. A trusted and often-quoted source for … More » U.S. Put-in-place Construction Growth to be near 9% in 2016 and 2017 (Part 2 Comprised mainly of a Table and Graphs)December 31st, 2015 by Alex Carrick, Chief Economist at ConstructConnect
Article source: CMDGroup CMD is projecting that by 2017, total annual U.S. put-in-place (PIP) construction spending will rise to $1.25 trillion. That’s versus an estimated $1.06 trillion in 2015 and a forecast $1.15 trillion in 2016. PIP numbers, both current and historical, are provided by the Census Bureau. (For an explanation of the differences between CMD’s starts statistics and PIP figures, please see Part 1 of this Economy at a Glance.) The total will reach that $1.25 trillion level through current (i.e., not adjusted for inflation) dollar gains of +8.6% in 2016 and +8.8% in 2017, on the heels of a +10.0% year in 2015. Residential work, which suffered a more severe pull-back in activity than the non-residential building category, during the Great Recession, will mount a slightly faster comeback (+10.5% in each of 2016 and 2017, after +11.5% in 2015). Non-residential building’s improvement (+10.3% in 2016 and +9.0% in 2017, after an impressive +18.0% in 2015) won’t be far behind. Non-residential building is the summation of commercial, institutional and engineering. Or, alternatively, it is the grand total less both residential and engineering. The +18.0% figure for non-residential building in 2015 has been due to some truly notable leaps in the ‘lodging’ (+28.5%), ‘office’ (+22.0%), ‘amusement and recreation’ (+29.0%) and ‘manufacturing’ (+48.0%) sub-categories. From here on, though, manufacturing’s increases are forecast to be more subdued (+10.5% in 2016 and +7.5% in 2017). The high value of the U.S. dollar is erecting a significant barrier to additional export sales, limiting further improvements to capacity utilization rates. Institutional PIP construction will display a relatively stable pattern (+7.5% in 2016 and +7.6% in 2017, after +7.8% in 2015). The health care sector will pick up the pace, but it will have to compensate for a moderation-of-trend in schooling, especially at the level of higher education. A low unemployment rate (5.0% at present) has one unfortunate side effect. It undercuts the urgency for enrolments at universities and colleges. Total engineering PIP construction was on a nice upward incline from 2004 through 2008. Once the recession set in, however, rather than falling, it flattened out and has stayed at about the same level ever since. The improving economic cycle is generating more property, personal-income, business and sales tax revenue. As federal, state and local governments use those funds to address an urgent need for new and repair infrastructure initiatives, the spending on civil work is expected to swing from -0.8% in 2015 to +3.5% in 2016 and an even better +5.9% in 2017. U.S. PIP series: http://www.census.gov/construction/c30/c30index.html Tags: Alex Carrick, architect, build, Canada, CMD, CMDGroup, construct, Economic, US Category: CMD Group |