Lead economists project modest growth in construction activity.

Total U.S. construction starts for 2018 will reach $765 billion, a 3 percent gain from this year’s projected level of $745 billion, according to Dodge Data & Analytics Chief Economist Robert Murray, who cites several positive factors suggesting the construction expansion that began in 2012 “has further room to proceed.”

The full, 36-page report on 2018 market activity can be ordered from Dodge Data & Analytics, 800/ 591-4462;

“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,” he told attendees of the 2018 Dodge Outlook Conference in Chicago.

“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. By major sector, gains are predicted for residential building, up 4 percent; and nonresidential building, up 2 percent; while nonbuilding construction stabilizes after two years of decline.”

“The industry has moved into a mature stage of expansion,” Murray noted. “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. As for public works, the specifics of a $1 trillion infrastructure program by the Trump Administration have yet to materialize, so activity continues to hover around basically the plateau for construction starts reached a couple of years ago.”

Among key segments, the 2018 Dodge forecast calls for year-over-year gains in single-family housing, 850,000 starts, up 7 percent; commercial and institutional buildings, up 2 percent and 3 percent, respectively; and, public works construction, up 3 percent. A projected 11 percent drop in multi-family housing, to 425,000 starts, against this year’s total tempers the overall 2018 residential market.


Norcross, Ga.-based ConstructConnect, the source of iSqFt, Construction Market Data, BidClerk, Construction Data plus companion information and technology solutions, cites across the board 2018 market growth potential within its Q4 2017 Forecast Quarterly Report. It combines proprietary data, macroeconomic factors and Oxford Economics econometric expertise, and indicates these higher project categories start levels for 2018 against this year’s figures: single-family residential, 8.8 percent; warehouses, 4.7 percent; nursing homes, 5.9 percent; educational facilities, 4.2 percent; roads and bridges, 5.9 percent and 10.2 percent, respectively; and, miscellaneous civil (power, oil, gas), 13.8 percent.


Dodge forecasts 2018 single-family home starts rising 7 percent above this year’s level.

“Out to 2021, residential will be the main driver of total construction starts, recording year-over-year increases of nearly 6 percent,” explains ConstructConnect Chief Economist Alex Carrick. “Non-residential building will disappoint, with gains of only about 2 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 Q4 2017 report assesses prospective 2018-2021 construction activity in light of a few ongoing economic trends: a synchronous world expansion is underway, with North America, Japan, China and Europe all experiencing GDP growth; housing starts as a reflection of demographic factors have fallen short of potential for almost a decade; increasing role of firms engaged in high tech behind office space demand; and, a rebound of prices for many internationally traded commodities. Free copies of the ConstructConnect Forecast Quarterly Report can be obtained at


An Associated Builders and Contractors report timed with 2018 market forecasting finds private construction interests’ value added as a percentage of the U.S. real gross domestic product rose to 4 percent in 2016, the highest level since 2009.

“Although the relative impact of the value added by private construction on various state economies varies both among states in a particular year and within a state over time, every state benefits from construction activity,” notes Bernard Markstein, Ph.D., whose eponymous firm conducted the analysis and prepared the report for ABC. “The increase in that activity in a particular year adds to the income and potential growth of each state. A decline in that activity acts as a drag on economic performance.”

A 3.5 percent national increase in real construction spending Markstein Advisors cites for 2016 was a slowdown from the prior year’s 4.9 percent increase. Only 18 states had a greater growth in real construction spending in 2016 compared to 2015.


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