For those living in the Central Texas area, seeking a construction company for your project this year or a few years ahead will bring a notably bright future. Although be cautious as to where you put your money at when construction and developing those plans and designs for your construction project. The future looks bright, showing its mature side of the design and building process, there are some indicators that you may want to be aware of when going to the drawing board.
Although for some industries, it’s a little bleak; such as the malls. Malls are being taken over by eCommerce shopping. With this in mind, the last quarter of last year (2016) showed a significant spending hike which reached more than $4 billion in the last quarter alone. This was major spending online; the department stores, malls, and outlets are all part of this portion of the economy that took a big hit. Although in the restaurant industry will continue to rise though. Therefore, the construction industry will see this as a result of this; building restaurants, cafes, and clubs are the essential in the construction industry. This includes, theatres, ping pong clubs, entertainment and venues, to name a few.
The outlook for construction
Dodge Data & Analytics Chief Economist Robert Murray admitted after the firm’s Outlook 2017 Executive Conference held at Maryland’s National Harbor, the construction industry is moving from a slow decline to a moderate and healthy outlook this new year. In other words, he feels that the phase of expansion will mature.
Not a decline, yet an overall healthy economy in the years that lie ahead. Murray claims that it barely kicked into gear in four years ago. The rebound from will be evident; although it’s not considered an economy boom, but a healthy moderate rise in the construction industry.
2017-2018 marks a prospers year. Illustrating the optimism, the construction industry has towards the developing and construction of homes, buildings, bridges, …etc. in which it plays an important role for the economy. There isn’t going to be a downfall like there was back in 2009. The construction lost out on major setbacks that year.
The three primary changes per industry to keep your eyes peeled at for this coming year.
Funds to Support for infrastructure spending
A boost in infrastructure funds shows a widespread gain that spreads across the U.S.A. The views on the public works divisions all across the nation illustrate the support that the boost will continue in all facets of the construction industries.
Extreme unpredictable indicator
The electric power and gas plant sector said to bring down optimistic outlook; Having the electric power/gas plant industry eliminated from the construction industry is the solution, Murray believes. Stopping the huge lows that particular industry has illustrated this past year shows that it’s turbulence of the construction sector will continue this year.
Impact of rising interest rates will not be immediate but significant in a few years: According to Murray, the Federal Reserve expects to raise “short term interest rates” this year. Interest rates will create that dampening element next year (2018) in which the construction industry will not feel until then. Although it’s moderate, it will lead to that slow pace of economic activity in the next couple of years. Which is healthy for the economy overall.
Predictions store and shopping center:
2016: -14% starts; 97 million square feet
2017: +5% starts; 102 million square feet
Predictions of Warehouse construction:
2016: +3% starts; 201 million square feet
2017: +2% starts; 206 million square feet
(Dodge Report; Oct. 2016)
How the predictions came about is the indicator that Dodge tracks down. In this case it’s the “kick off” of the construction project. Start numbers are the leading indicator in the lead spending figures. It predicted that in 2016 it would rise up to 6% ($712B); it was currently different by 1% ($676.4B). A positive outlook for the construction industry.
It’s a good indicator by the Outlook report studied and researched by Dodge. The future activity for “residential, commercial, institutional, manufacturing, public works and electric utilities/gas plants construction sectors” are reluctantly favored in the majority of the industry’s segments. This suggests that in 2017, the forecast for the performance in the construction industry will see the tides rise more abundantly as compared to a few years before.
Source: Emily Peiffer; Oct. 24, 2016. http://www.constructiondive.com/news/inside-the-dodge-2017-construction-outlook-commercial-and-residential-pred/428821/