While COVID-19 delays some projects, growth in the residential and nonbuilding sectors will spur gains
By Subcontractors USA News Provider
US construction expenditures are forecast to increase 3.7% yearly in nominal terms through 2024, according to Construction: United States, a report recently released by Freedonia Focus Reports. Contractors stand to benefit from continued gains in the number of households; consumer incomes; and business, nonprofit organization, and government investment. However, 2020 represents a mixed bag, with continued growth projected for housing and nonbuilding construction, but a decline of several percentage points in commercial. Due to the COVID-19 pandemic, many construction projects – particularly in the commercial segment – have been delayed, but not outright canceled, due to a decline in revenues in industries such as lodging and restaurants. For this reason, commercial building expenditures are expected to see the worst performance in 2020. Other segments, such as nonbuilding, are seeing construction go ahead as planned because most of these projects are funded by government grants. However, declines in state and local tax revenue may constrain projects funded at those levels. Despite this, nonbuilding construction expenditures will see the fastest rate of growth through 2020. Overall, construction expenditures are expected to rise 1.1% this year.
Among the four major US regions, the South will continue to dominate construction activity through 2024. Construction spending in the West is projected to slightly outpace expenditures in the Midwest, Northeast, and South due to faster population and GDP growth.
These and other key insights are featured in Construction: United States. This report forecasts to 2024 US construction expenditures in nominal and real (inflation-adjusted) US dollars.
Total expenditures in nominal and real terms are segmented by market in terms of:
- residential building
- new single-unit housing
- new multiple-unit housing
- Improvements
- commercial building
- office, trade, and lodging
- institutional
- industrial
- transportation
- other commercial buildings such as public safety and recreation
- nonbuilding
- highways, streets, and other transportation
- power
- sewer and water
- telecommunication
- other nonbuilding construction such as breakwater systems and dams
Total expenditures in nominal dollars are also segmented by US region as follows:
- South
- South Atlantic
- West South Central
- East South Central
- West
- Pacific
- Mountain
- Midwest
- East North Central
- West North Central
- Northeast
- Middle Atlantic
- New England
To illustrate historical trends, total expenditures and the various market and region segments are provided in annual series from 2009 to 2019.
The scope of this report represents new construction and improvements such as additions, alterations, and major replacements (e.g., heating systems). Maintenance and repairs for existing structures and service facilities are excluded. Also excluded are land acquisition costs, drilling of gas and oil wells, and digging and shoring of mines.
As defined by the US Census Bureau, expenditures represent architectural and engineering costs; labor, material, and overhead costs; interest and taxes paid during construction; and contractors’ profits.
More information about the report is available at www.freedoniafocusreports.com.
Source: The Freedonia Group
