Construction growth/decline, challenges, cost reduction & future trends.

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What is the growth/decline in the Construction industry:

Dodge Data & Analytics publishes an annual industry forecast report, considered one of the most accurate by industry experts. The report, which was released earlier this month, finds:

  • Total construction for 2015 “is on pace to reach the largest gain during the current expansion — since the crippling economic recession.”
  • It “will grow 13% to $675 billion, largely due to major gains in nonbuilding construction and residential building.”
  • “In 2016, construction starts are expected to grow 6% to $712 billion.” The leader will be residential building, “with a 16% gain. Dodge predicts the U.S. economy in 2016 will support continued growth in the construction sector.”
  • Long-term rate increases are expected to rise only gradually, and along with “easing lending standards and an influx of funding support from state and local construction bond measures,” should lead to 2016 as “a year of slow, but steady, expansion for the construction industry.”
  • Other construction sectors will grow more slowly: “Dodge expects institutional construction to expand 9%, manufacturing to fall 1%, public works to remain unchanged, and electric utilities/gas plants to plummet 43%.”

IBISWorld data follows:

  • Commercial construction: IBISWorld, in its Commercial Building Construction in the US, report 23622a Aug. 2015, calls for revenue to increase in the five years to 2015 “at an annualized rate of 5.0% to $175.5 billion, including a 2.6% rise in 2015 alone.”
  • Industrial construction: IBISWorld, in its Industrial Building Construction, report 23621 dated Sept. 2015, calls for industry revenue “to increase at an average annual rate of 3.4% to $27.6 billion during the five years to 2015.”
  • Home builders: “In 2015, industry revenue is expected to increase 5.3% to $66.3 billion as a result of wage growth and improved access to credit by households.” (Home builders in the U.S., report 23611a Oct. 2015)
  • Housing developers: ‘Industry revenue is forecast to grow an annualized 7.3% to $138.7 billion over the five years to 2015. Additionally, revenue is forecast to grow a stronger 9.8% in 2015 as consumers act on relatively low prices and cheap credit.” (Housing Developers in the US, report 23611c, Nov. 2015)
  • Multi-family housing: Apartment and condominium construction “has experienced one of the fastest expansions among residential construction industries over the five years to 2015.” Factors include decreasing vacancy rates, increasing rent prices, declining homeownership rates, “aggressive lending into the multifamily sector,” and improved employment and disposable income. “Due to the historically low level at the start of this period, industry revenue is expected to grow at an average annual rate of 14.0% in the five years to 2015.” (Apartment & Condominium Construction in the US, report 23611b Oct. 2015