ConstructConnect, a leading provider of construction information and technology solutions in North America, recently released Q4 2017 Forecast Quarterly Report. The forecast, which combines ConstructConnect's proprietary data with macroeconomic factors and Oxford Economics econometric expertise, shows that 2017 total starts are now expected to be +7.9% (versus an earlier calculated +4.5%). Residential has been upgraded to +10.1% and engineering/civil to +23.1%. Non-residential building has been left essentially flat at -0.5%.
For 2018, the new forecasts shave a bit off what was previously expected. Total starts are now projected to be +4.8% — a little slower than the +5.9% of a quarter ago. Residential will be +6.7% in 2018; non-res building, +1.9%; and heavy engineering/civil, +6.6%. 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.
“Out to 2021, residential will be the main driver of total construction starts, recording year-over-year increases of nearly +6.0% or more,” said Chief Economist Alex Carrick. “Non-residential building will disappoint, with gains of only about +2.0% 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.”
Download a free copy of the Forecast Quarterly Report here.