Building Forecast for Key Market Sectors
OnBoard Newsletter | February 2018
Your profession requires you to be visionary – always looking ahead to what’s next on the building horizon. Several National Gypsum team members recently attended the 2018 Dodge Construction Outlook, and we have some interesting takeaways to share with you. As you assess the following material, remember your construction design manager is available to help guide you in meeting specific goals or selecting the best products for your upcoming projects.
Indicators Point to a Good Year Ahead
According to information compiled by Robert Murray, chief economist and vice president of Dodge Data & Analytics, in U.S. market sectors’ construction starts (full value of a project in the month in which it began) and construction spending (work as it occurs or impact from start to finish) expansion is continuing, although there was some deceleration from 2016-17 (1 percent for both starts and spending).
Commercial, Institutional and Residential
Activity had trended upward from 2011 through 2014. There was a pause in 2015, followed by moderate growth in 2016 and 2017. Projections increase slightly (2 percent) for 2018.
- Hotels – Construction climbed sharply from 2011-15 and is settling back down. A decrease (of 4 percent) is forecasted for 2018.
- Schools – Contingent upon school construction bonds passing, educational building starts increased in 2014, paused in 2015 and resumed in 2016-17. 2017 showed particular increase (based on square footage) for colleges and universities – up 22 percent.
- Healthcare – These facilities had hovered in recent years with a boost in 2017. Based upon square footage, hospital building is up 4 percent and clinics/nursing homes are up 5 percent. There is a forecasted 2 percent increase in 2018.
- Multi-Family Housing: Construction showed steady gains in 2010-15, but lost momentum in 2016. The push for downtown redevelopment, with support from empty nesters and young adults, will hopefully help shift it upward again.
- Single-Family Housing: Between 2015 and 2017 there has been improvement with moderate growth. Sales are increasing with home prices rising an average of 5-6 percent year over year. (For example, there were 683,000 units built and sold in 2015 and 795,000 units built and sold in 2017 – with 850,000 units projected for 2018.)
The Dodge Momentum Index measures the first or initial reports for non-residential building projects at the planning stage. The DMI bottomed out in summer 2011 but has been trending upward through the first half of 2017. In the third quarter of 2017, both commercial and institutional projects lost momentum. But in October 2017, there was a rebound with signs of an upward trend.
Contact Your CDM for Details
Your National Gypsum construction design manager is always just a phone call or email away, ready to assist you with any project questions. Let us help you make this a stellar year.
“Industry projections, like those provided by Dodge Data & Analytics, highlight areas for potential expansion, giving design professionals and contractors confidence to align their business plans with these growth assessments. Hopefully these predictions are accurate, and we will continue to see positive advances in the commercial and residential construction markets in 2018.”