After a precipitous decline of 14% this year, construction starts nationally are expected to increase by 4% next year, providing the latest evidence of a recovering industry, according to Dodge Data & Analytics.
The industry number-crunching service is predicting a 5% jump in residential construction next year, with nonresidential construction up by 3%.
The residential sector, notes Richard Branch, Dodge chief economist, will “exceed its 2019 level of starts, thanks to historically low mortgage rates that will boost single-family housing.”
The report is additionally predicting that the overall dollar value of single-family housing starts will be up by 7%, with the number of units growing by 6%.
Reflecting the unprecedented growth of e-commerce businesses, commercial building starts, which includes new warehouse construction, are expected to be up by 5% in the next 12 months.
Data center construction, listed in the office construction category, is also slated to see an increase, as well as institutional construction, which will be marginally up by 1%.
But the report is also expecting to see a decline in education construction as well as a drop in petrochemical work.
The strongest category heading into next year will be seen in electric utilities and gas plant work, forecast for a 35% jump.
The utilities and plants sector is anticipated to see increased wind farm work, along with starts expected on several large liquefied natural gas export facilities.
While the numbers for 2021 are for the most part on the up side, Branch notes that the Covid-19 outbreak and subsequent economic shutdown prompted a “deep drop off in construction starts in the first half of 2020.”
Overall, the industry suffered a loss of $738 million this year.
“While the recovery is underway, the road to recovery will be long and fraught with potential potholes,” Branch predicts.
By Garry Boulard
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