Construction Outlook Good for 2016
November 10, 2015
While October was not kind to the Dodge Momentum Index, Dodge Data & Analytics nevertheless expects the current construction expansion to continue through 2016.
In its annual Dodge Outlook Conference, held in October, Dodge predicted a rise of 6 percent in total U.S. construction starts for 2016. That would follow double-figure gains in 2012 and 2013, a jump of 9 percent in 2014, and an expected gain of 13 percent in 2015.
According to the Dodge report, nonresidential building will advance 9 percent in 2016, with residential increasing 16 percent.
Dodge projects commercial building will increase 11 percent, up from the 4 percent gain estimated for 2015, with office construction continuing to lead the way. Institutional building won’t be far behind, with a projected increase of 9 percent, up from 2015’s expected 6 percent gain.
Meanwhile, the Momentum Index, a monthly measure of first reports for projects in planning, fell 4.8 percent in October. Those reports have been shown to lead construction spending for nonresidential buildings by a full year.
Nevertheless, the Index is up 4.8 percent compared to October of 2015.
Planning for institutional projects dropped 4.6 percent – quite a turnaround from September’s 10.6 percent jump. Commercial projects fell 5 percent, after gaining 1.7 percent in September.
In other economic news, construction employment increased by 31,000 in October, following months of little change, according to the Bureau of Labor Statistics. That hiring hike brings the number of construction jobs added in the past 12 months to 233,000.