Overall construction spending is expected to rise 6.3 percent over the previous year to $1,234.5 billion in 2017, and then expand another 7.2 percent in 2018, according to a forecast from ConstructConnect.
"This is welcome news because construction spending growth slowed in 2016 compared to the previous two years," said Alex Carrick, chief economist for the firm. "Total construction spending for 2016 is expected to grow 4.4 percent to around $1,161.4 billion. This is well below the 11 percent growth we saw in 2014 and 2015." Recent Census Bureau data shows ConstructConnect is on target with this 4.4 percent prediction.
Residential construction spending is expected to grow 7.4 percent in 2017 to $501.7 billion, while total nonresidential, even with some subsectors performing very well, is predicted to increase only 5.5 percent this year to $732.8 billion.
The subsectors expected to see the largest spending growth this year: office buildings, 12.9 percent; health care facilities, 12.6 percent; and lodging, 12.4 percent. On the downside, manufacturing will drop 7.2 percent in 2017. Highway and street construction spending is forecast to increase 6.4 percent this year, due in large part to the passage of the Fixing America's Surface Transportation (FAST) Act, legislation that will provide $305 billion over a five-year period.
It will be interesting to see whether President-elect Donald Trump can get his 10-year, $1 trillion infrastructure spending plan approved by Congress, said Kendall Jones, editor-in-chief of ConstructConnect's blog.
ConstructConnect's mission is to provide construction industry professionals with the most complete and accurate preconstruction data possible. Its clients include general contractors, subcontractors, building product manufacturers, designers and architects, among others.