Economists: Warehouse Construction Leads Post-Pandemic Recovery Recent economic data from the construction industry depict an upswing from the fiscal downfalls associated with the pandemic, but those numbers are being skewed by specific construction sectors that have exploded in the last year. Warehouse and data center construction have shown meteoric growth, while nearly all other sectors have declined and are only recently showing signs of recovery.
The good news is that most analysts predict a surge in spending in the coming months. “Projects entering the planning stage remain at levels not seen in several years,” Branch says, “and forward progress on an infrastructure program and the federal budget provides hope that brighter days are ahead.” He says the importance of the five-year infrastructure bill cannot be overemphasized. “Our models are suggesting that thanks to the $550 billion infrastructure package, the total nonbuilding starts will increase by 34 percent from 2021 till the end of our forecast window in 2026.” Dodge has not included the bill in this year’s forecast for
According to the third-quarter construction outlook
total construction spending.
released in late August by Dodge Data & Analytics, the
Cost of materials impacts spending
economy — at least for the construction industry — is
The numbers this year remain sluggish, but eight
“moving sideways.” Steady growth is being hampered by
construction economists from varying investment
skyrocketing material prices, shortages of skilled labor,
and consulting firms that make up the Washington,
the threat of runaway inflation, and a surge in the delta
D.C.-based American Institute of Architects’ midyear
variant of the coronavirus.
Consensus Construction Forecast panel predict a
Dodge predicts a 7 percent increase in total construction spending, totaling $855 billion by year’s end, which would be similar to pre-pandemic totals in 2019. However,
4.6 percent increase in nonresidential construction spending in 2022, compared with a decrease of 3.9 percent this year.
Dodge chief economist Richard Branch notes that if
The rising cost of construction materials threatens to
residential construction data were removed from the total,
stagnate construction spending throughout the U.S. in
“we are looking at another year, potentially two years,
the coming months. In general, construction material
before nonresidential building is back to its 2019 peak.”
costs have risen more than 33 percent in the last year,
40
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