New Construction in U.S. Expected to Grow 6.5 Percent in 2016

CMD Releases Quarterly Forecast Report Revealing U.S. Construction
Slightly Underperformed in 2015, but Growth Lies Ahead in 2016

ATLANTA–(BUSINESS WIRE)–Construction starts in the United States are expected to increase 6.5
percent and total more than $560 billion in the coming year, according
to CMD’s
latest quarterly forecast report. An overall recovering economy,
including wage and employment growth, increased state and federal
spending on infrastructure projects and an improved investment outlook
in non-residential construction are contributing to the forecast.

The report, which combines CMD’s proprietary data with macroeconomic
factors and Oxford Economics econometric expertise, shows year-end
growth came in slightly below expectation. A weaker fourth quarter
depressed construction activity, leading to total construction starts
growth of 3.7 percent in 2015. A disappointing decrease in
non-residential starts of -3.0 percent, were offset by positive growth
of 6.3 percent in residential construction starts and 10.8 percent
growth in engineering/civil construction starts.

“At an annual growth rate of 3.7 percent compared with 2014’s 7.4
percent, the accelerator was eased on total U.S. construction starts in
2015,” said Alex Carrick, CMD chief economist. “The non-residential
building category underperformed, while residential work maintained a
steady upward path and engineering starts surged.”

According to the report, the demand for single-family homes will exceed
the demand for multi-family homes and drive the performance of
residential starts over the next several years. Additionally, industrial
starts, which increased greatly in 2014 and 2015, will be blunted by
depreciation in the U.S. dollar. Medical starts, which increased 8.6
percent in 2016, will settle around 5.0 percent annual growth from 2017
to 2020 as they ride the crest of an aging population.

“Overall starts in 2016 will pick up the pace to 6.5 percent, with
cyclical improvement in jobs and incomes heating up residential demand,
non-residential building work beginning to break loose, however, the
engineering/civil category projects to slow down after such a strong
prior year,” stated Carrick.

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the Innovation Partner of the AIA, is a leading North American provider
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Mike Rieman, 404-816-2037