Economists at the 2018 Dodge Construction Outlook assured several hundred construction industry executives that their growth prospects for 2018 should be good but not necessarily great.
Along with presentations from several of the construction industry’s leading economists, the event, held Nov. 2 in Chicago, offered some intriguing presentations on how technology is helping the industry move toward a more collaborative process on job sites. Speakers said utilizing BIM and cloud-based project management software and adopting best practices from other design-related industries is ushering in a new era of enhanced productivity that eliminates waste on job sites by cutting down on change orders and bringing architects, engineers, subcontractors, manufacturers and their distributors into a project’s lifecycle early in the design process. They also said augmented reality systems and onsite 3D manufacturing of building products or systems and in some cases even entire buildings is now a reality.
On the economic front, the news was generally positive. “The U.S. construction industry has made the transition to a more mature stage of expansion,” said Robert Murray, chief economist for Dodge Data & Analytics, in a press statement released before his main presentation. “After climbing 11% to 13% each year from 2012 through 2015, total construction starts advanced 5% in 2016, and that pattern of deceleration remains present in 2017.
“Yet, while some project types like multifamily housing are losing momentum, other project types such as office buildings, education facilities, and transportation terminals are picking up the slack. How this shifting mix by project type plays out will determine if the lengthy expansion for construction can continue into 2018.”
Dodge Data & Analytics said single-family housing will rise 9% in dollars, corresponding to a 7% increase in units. Employment growth has eased some of the caution shown by potential homebuyers, while older Millennials in their 30s are helping to lift demand for homes. A modest boost will also come from rebuilding in Texas and Florida after the hurricanes.
Dodge also said commercial building will increase 2%, following a 3% gain in 2017, and continue to decelerate after the sharp 21% hike back in 2016. Office construction should see further growth in 2018, helped by broad development in downtown markets, and warehouse construction is supported by greater demand arising from e-commerce.