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Starts Forecast to Go Up 6.5 Percent in 2016
After Climbing a Mere 3.7 Percent in 2015


Total nonresidential and residential construction starts experienced a lull in 2015, but Construction Market Data Group believes it will rebound in the coming year.

Total residential and nonresidential building starts are forecast to climb 6.5 percent to $560 billion in all of 2016, Construction Market Data Group said in its fourth-quarter 2015 report.

CMD is basing its prediction on factors such as a steadily recovering economy, wage and employment growth, increased state and federal spending on infrastructure projects and an improved investment outlook.

A weak fourth quarter caused total starts to expand a mere 3.7 percent in 2015, CMD said. By category, nonresidential starts dropped 3 percent, but residential activity expanded by 6.3 percent, and engineering/civil construction starts jumped 10.8 percent.

"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's chief economist. "The nonresidential building category underperformed, while residential work maintained a steady upward path and engineering starts surged."

Demand for single-family homes will exceed the demand for multifamily homes and drive the performance of residential starts over the next several years, CMD said.

Additionally, industrial starts, which increased greatly in 2014 and 2015, will be blunted by depreciation in the U.S. dollar, Carrick said.

Medical starts are forecast to grow 8.6 percent in 2016, and then average 5 percent annual growth from 2017-2020.

For Construction Pros:

FMI Releases Q4 Construction Forecast
Construction put in place projects will expand by about 10 percent in the 2015 calendar year, FMI has forecast in its fourth quarter Construction Outlook.

FMI had predicted a pace of 6 percent in its third quarter report.

In 2015, manufacturing has jumped 25 percent; lodging is up 23 percent; office construction has climbed 19 percent; and amusement and recreation has increased 16 percent.

Total construction in 2016 is expected to reach $1.14 trillion, the highest total since 2007, FMI said.

Manufacturing will slow to 11 percent growth in 2016, while lodging is expected to expand by 17 percent. Office construction should grow at a much slower pace than in 2015.

FMI is a leading provider of management consulting services to the engineering and construction industries.

Source: FMI

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July 16, 2019, 12:23 pm PDT

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