Dodge Construction Network released its Outlook 2024 Construction Forecast, and the overall numbers look quite bullish.
The report said, “After a year in which the economy and starts slowed considerably, the coming year should provide a transition to stronger growth for construction. In 2024, total construction starts are expected to gain +7% to $1.2 trillion after growth slowed to just +1% in 2023 (and was down -2% after adjusting for inflation.”
The Dodge Forecast was particularly bullish about residential building and sees single-family construction growing +9% in 2024 to $244 billion and multi-family construction surging +14% to $153 million. It’s not quite as optimistic about commercial construction and is forecasting a -2% decline to $153 billion, due in part to what it called “Amazon’s moratorium on new warehouse construction.” Office construction will decline -2% in 2024, Dodge said, in part because of the move to remote offices.
Manufacturing is in for another strong year with a +16% gain, the Outlook 2024 forecast said, but the construction labor shortages that bedeviled the market last year because of how many mega projects broke ground could be an issue again next year. Dodge's 2024 Outlook forecast appears to be more bullish for the industrial market now than it was in July, when it forecast a +5.4% gain for this segment in the 2024 Consensus Construction forecast published by the American Institute of Architects.
In the institutional construction segment, the forecast sees a +3% increase to $194 billion in spending, but said that softer enrollment numbers at K-12 schools and colleges will tamp down demand in the educational market segment.
Dodge’s economists appear confident the overall U.S. economy will gain momentum through 2024. “If the economy can weather the storm over the next six months, the outlook becomes much clearer. In early 2024, economic growth will continue to ebb, and job growth will slow. But this downshift will take a bite out of inflation bringing the core Consumer Price Index down to 3% by mid-2024 That will allow the Fed to begin easing and the economy to recover in the latter part of the year.”