New construction in U.S. expected to grow 10.5% in 2015
Construction starts in the United States are expected to increase 10.5 percent in the coming year and 4.4 percent in Canada, according to CMD’s latest quarterly forecast report. Sustainable wage growth, increased business spending and an expanding manufacturing market are contributing to the strong forecast.
The report, which combines CMD’s proprietary data with macroeconomic factors, showed a strong fourth quarter for the U.S. construction market, with total starts rising 5.9 percent in 2014. Slightly disappointing results in the residential market were offset by above-expected growth in civil engineering and non-residential building sectors.
“The outlook for the U.S. economy continues to improve, and we are expecting increases in both business and consumer spending in the coming year,” said Alex Carrick, CMD chief economist. “Evidence of sustainable wage growth and falling inflation due to declines in oil prices should translate into growth in both residential and non-residential building construction.”
According to the report, the demand for physical space for new manufacturing construction is on the rise as U.S. firms continue to re-shore their operations. Lured by low energy prices and a declining competitive advantage in developing countries (notably China), the U.S. has once again become an attractive destination for high value-added manufacturing.
In the residential sector, multi-family residential starts remained relatively strong as millennials continue to choose high-rise apartments and condominiums in urban centers rather than suburban, single-family construction.
Expectations for 2015 in Canada are relatively lower. Key drivers for growth in the construction market stem from a boost in demand as low oil prices feed consumer growth and business investment. The new long-term equilibrium oil price will squeeze the more technologically complex operations in Canada’s energy sector, potentially dampening new civil engineering projects.
CMD customers will be able to access the new forecast models in the updated version of the Insight platform, which also includes improved features for exporting and utilizing the data.
For more information or to purchase the Insight Platform, visit cmd.group.com.
