Despite Pandemic Economy, 2021 May See Some Bright Spots for the Nation's Contractors, Says Report
The next 12 months may see continued demand for both Class B office space as well as new e-commerce facilities.
Those two growing market segments, according to a new report issued by the Washington-based Associated Builders and Contractors, represent a few of the projected bright sports for the nation’s contractors as they enter 2021.
Using data from the group’s Construction Backlog Indicator, the report, authored by ABC chief economist Anirban Basu, notes that the number of projects under contract, but not yet executed, saw a marginal increase late last year after a general decline for most of 2020.
In general, says the report, demand for Class A office space has remained significantly off, while residential construction has maintained a soaring presence.
The current downward industry numbers, beginning in the spring of 2020, came after an unprecedented era of sustained growth reaching back to the final months of the Great Recession nearly a decade ago.
But, says the report, “all that gathered economic momentum scarcely mattered” when Covid-19 came along.
“The current recession was not caused by a loss of demand,” continues the report, “but rather by a massive shock to the economy’s capacity to supply.”
This meant that by the early summer of last year the construction industry was hit with the most dramatic job losses in its history, equal to nearly 22 million jobs—almost the same number that had been created during the boom years of 2012 to 2020.
For all of that, by September, 63% of the industry’s lost jobs had been recovered, a record far above what was being seen at the same time in the nation’s manufacturing, information, and government segments.
That job growth has been in many cases greatly fueled by increased housing construction.
“With more and more Millennials coming of age, coupled with the high rate of people looking to social distance, to take advantage of record low mortgage rates, and to acquire enough space for a home office, housing demand has raced even higher during the pandemic,” contends the report.
While residential construction is expected to see a healthy 3.3% increase this year, most of the other market segments will be on the down side, with office construction off by 6.2%, religious institutional work down by 10.9%, and amusement and recreation projects seeing an 8.0% decline.
Projected segment increases for 2021, meanwhile, include health care construction, with a forecast 4.5% increase; water supply work, up by 7.3%, and public safety projects, expected to enjoy a robust 11.2% jump.
By Garry Boulard
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