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12-09-21 | Economic News

2021 Economic Review & Outlook - Total Residential Construction

Residential

Total Residential Construction Spending
The value of construction put in place saw growth with an increase of 7.1 percent from September of last year as total private construction is up 11.3%. Total public construction however was down 5.5% with drops in the largest subsectors: public safety at -33.3% and conservation and development at -19.5%.

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Dodge Data and Analytics reported that October was a big month for construction as total construction went up 16% and non-residential building starts saw an increase of 29%.

"Economic growth has resumed following the third quarter's Delta-led slowdown. However, the construction sector's grip on growth remains tenuous," stated Richard Branch, Chief Economist for Dodge Construction Network. "Long term, construction starts should improve, fed by an increase of nonresidential building projects in the planning pipeline and the recent passage of the infrastructure bill. Both will provide meaningful support and growth to construction in the year to come. This expectation, however, must be tempered by the significant challenges facing the industry: high prices, shortages of key materials, and the continued scarcity of skilled labor. While healing from the pandemic continues, there's still a long road back to full recovery."

Lawrence Yun, the Chief Economist with the National Association of Realtors, explained the housing side of the 2021's economic performance as noted the housing sales have remained resilient despite issues with affordability and low inventory. Yun also noted changes in workforce environments have had an effect in the housing market, "Among some of the workforce, there is an ongoing trend of flexibility to work anywhere, and this has contributed to an increase in sales in some parts of the country," said Yun. "Record-high stock markets and all-time high home prices have worked to significantly raise total consumer wealth and, when coupled with extended remote work flexibility, elevated housing demand in vacation regions."

Filed Under: ECONOMY, 2022 OUTLOOK, SHORTAGES
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