Looking into the Crystal Ball
- Published: Thursday, 07 November 2013 16:34
As 2013 winds down, experts are starting to get a better idea of how 2014 is going to look. McGraw Hill Construction, part of McGraw Hill Financial, just released its 2014 Dodge Construction Outlook, a mainstay in construction industry forecasting and business planning. The report predicts that total U.S. construction starts for 2014 will rise 9 percent to $555.3 billion, higher than the 5 percent increase to $508 billion estimated for 2013.
Based on research of specific construction market sectors, McGraw Hill Construction’s 2014 Dodge Construction Outlook details the forecast as follows.
■ Single-family housing will grow 26 percent in dollars, corresponding to a 24 percent increase in units to 785,000. The positives for single-family housing are numerous – the pace of foreclosures has eased, home prices are rising, and mortgage rates remain near recent lows. However, the demand for housing will continue to be restrained by careful bank lending practices toward issuing mortgages.
■ Public works construction will drop 5 percent, pulling back after a 3 percent gain in 2013 that was lifted by the start of several large highway and bridge projects. More focus on deficit reduction will limit federal support for environmental public works, although the improved fiscal position of state and local governments will help to cushion the extent of the public works decline.
■ Multifamily housing will rise 11 percent in dollars and 9 percent in units.
■ Commercial building will increase 17 percent, a slightly faster pace than the 15 percent gain estimated for 2013. Both warehouses and hotels will continue to lead the way, while stores and office buildings pick up the pace.
■ Institutional building will edge up 2 percent, turning the corner after five years of decline.
■ Electric utility construction will retreat 33 percent.
While expansion is always good, of critical importance to aggregates producers next year is the expiration of MAP-21 on Sept. 30, 2014. An adequately funded surface transportation reauthorization bill is a high priority. The real question is, what are the prospects for passage with a Congress as pathetic as this one?
We still have a lot of work to do.