Dodge Data and Analytics released its ‘2016 Dodge Construction Outlook,’ which forecasts a six percent increase in American construction starts next year to reach $712 billion.
In 2016, commercial building will advance 11 percent with office construction continuing to lead, followed by private developments and construction related to technology and finance firms. Institutional construction will increase nine percent as the educational facility category sees an increase in elementary schools. Public works will remain the same as 2015 due to a slight reduction in highways and bridges balancing out a slight increase in environmental work. Manufacturing plant construction is expected to decline one percent following its deep 28 percent plunge last year.
“The expansion for the construction industry has been underway for several years now, with varying contributions from each of the major sectors,” said Dodge’s chief economist, Robert Murray. “Total construction activity, as measured by the construction starts data, is on track this year to record the strongest annual gain so far in the current expansion, advancing 13 percent,” he said. “Much of this year’s lift has come from non-building construction, reflecting the start of several massive liquefied natural gas terminals in the Gulf Coast region, as well as renewed growth for new power plant starts.”
“Residential building, up 18 percent this year, has witnessed continued strength for multifamily housing while single family housing seems to have re-established an upward trend after its 2014 plateau,” he continued. “At the same time, nonresidential building has decelerated this year after surging 24% back in 2014, and is now predicted to be flat to slightly down given a sharp pullback for new manufacturing plant starts and some loss of momentum by its commercial and institutional building segments.”
The report can be purchased here.