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Construction forecast for 2017

March 7, 2017

The winter weather is leaving us, the sun is getting brighter and warmer, and spring construction is gearing up. Find out what’s predicted for the rest of the year.

Looking into 2017

Most construction forecasts happen in December or January, when economists and the like want to break down the numbers and trends. It seems like those months were so chaotic with holidays and finalizing lists—and the 2016 election results—that forecasting was lost.

Now that we are into 2017, lets stop to see what’s coming. While trends can shift, forecasting can still be a good basis for preparation.

What experts say

Construction starts decreased 1.3% in 2016, but Dodge Data & Analytics believes there will be a 5.4% increase in 2017. FMI Corp. predicts construction put-in-place will grow 3.9% this year, following 2016’s 4.9% increase. The National Association of Home Builders states single-family housing starts will leap by 12.3%.

Robert Murray, chief economist for Dodge, thinks the key items to watch this year will be coming from Washington, D.C., and the new administration. We need to see if the Affordable Care Act will be repealed (it will have a negative impact on health-care construction), if infrastructure will be a top investment (spending will create jobs) and if energy-related regulations will change (energy infrastructure growth would result).

What to watch

Markets you need to watch are office-building starts, which is expected to increase 9% after a great 2016 (18% increase). Murray adds, “Hotel construction has probably reached its peak with this year’s [2016’s] estimated 25% increase in starts.”

FMI also predicts continued growth in the overall construction market but at a slower pace. Brian Strawberry, senior economist at FMI, notes that many sectors, like residential construction, have seen double-digit growth that cannot last. “We’ve been playing catch-up since the recession,” he says. “Things are settling down now.”

On the non-residential side, FMI sees more slowing. “A lot of private projects were in planning and are now underway or completed,” Strawberry says. He believes, however, that the public markets, such as institutional and infrastructure projects, will pick up. “If you look at 2017, 2018 and 2019, you’ll see attractive growth rates in education and health care, with health care going a touch faster than education,” he adds.

What it means for you

So much in our country seems to be up in the air right now. While everyone wants the best, determining how to get there has set off disagreements like never before. In the end, we all must keep going—working and planning for the future.

To stay on track, peek at some forecasts at construction.com or fminet.com. As forecasts are released quarterly, these updates might give you some ideas about where your bids should be going. Follow heath care, residential, office and education markets closely. Being informed and prepared is always better than crossing your fingers and hoping for the best.

As your 2017 projects are completed, we ask that you let us know how you have used our products so we can highlight your work in our marketing for the year! Send them to us at rwidmer@flexabilityconcepts.com

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