Construction Starts 2016 with a Bang

It’s easy to get skittish about the U.S. economy if you just focus on the pain the energy market is suffering through right now.

For the time being, the U.S. construction market seems to be insulated from such a dire scenario, and some leading construction economists are downright bullish, according to the 2016 Consensus Construction Forecast published by the American Institute for Architects (AIA), Washington, D.C. According to this outlook, which incorporates the forecasts of construction economists from Dodge Data & Analytics, IHS Economics, Moody’s Economy.com, FMI, Construction Market Data (CMD), Associated Builders and Contractors, and Wells Fargo Securities, the nonresidential market should grow 8.2% next year. The economists’ forecasts are even more bullish for the commercial, office, hotel and industrial niches, which they expect will all enjoy double-digit growth this year.

Analysis of recent news coverage of more than 30 big construction projects that are either approved, planned or under review point toward a very healthy construction climate indeed for many cities (see chart on page 2). These projects are quite diverse and include luxury office towers, new sports facilities for pro teams, natural gas-fired power plants, auto plant expansion, convention facilities, industrial plants and light-rail projects. These projects are diverse in their geographic mix, too, although a has been the case over the past few years, New York, Boston, Dallas, Austin, the Gulf Coast and San Francisco continue to see much more construction than other areas.

San Diego is also seeing a ton of new construction and according to a recent article in the San Diego Union-Tribune there’s $6.4 billion  in development in the pipeline or now underway, including 8,106 apartment units; 1,164 condos; 685,695 square feet of office space; 2.6 million square feet of retail space and 3,866 hotel rooms.

As Electrical Marketing has reported in the past, there’s also quite a few LNG (liquefied natural gas) export terminals waiting approval. When these projects get going, their total construction value each easily tops $1 billion. In British Columbia, there’s even more action with LNG. Well over a dozen individual LNG terminals are waiting for review, and it’s estimated a giant LNG export terminal Shell wants to build will cost $40 billion.