The Big Picture
Financial giant Moody's anticipates 2018 GDP gains to be 2.9%, thanks mostly to stronger growth in residential investment and government spending. That's an increase from the 2.19% expected to be recorded for 2017, up from the 1.49% of 2016, when the final numbers are tallied.

IBISWorld, a supplier of business information and market research, says that their evaluation of the landscaping industry puts its continuing ten-year growth through 2022 at an annualized rate of 3.4%, a faster expansion than predicted for the U.S. economy during that period.

Business forecast publisher Kiplinger says the improved climate for business spending in the U.S. will continue in 2018, with a high level of equipment purchases, and increasing business construction. Also home building is expected to rev up, given the shortage of homes for sale relative to demand. And, Moody's anticipates business investment to increase by 4.5% next year, up from an anticipated 4.07% figure for 2017.

Housing Permits
The latest monthly numbers for privately-owned housing units authorized by building permits came in at 1,215,000: 4.5% below the last month's rate and 4.3% less than a year ago. But single-family authorizations were 2.4% above the previous month. Global economics research and forecasting firm Trading Economics predicts a 7.4% drop in permits in Q4/17 from the previous quarter, which will be more than gained back with an 8.9% climb by Q3/18.

Housing Starts
Mixed results were seen in the most recent reporting of starts, with a month-to-month drop of 4.7% but a gain of 6.1% over last year's annual rate. For the year, Moody's expects an increase of 5.17%. That's lower than what was earlier anticipated, and the 6.34% increase clocked in during 2016. Their analysis says this is due to a tight labor market, which has limited the capacity for new construction. However, despite the downside risk of labor shortages, Moody's forecasts a robust 26.11% increase in 2018 housing starts due in part to increased housing permits and reconstruction in the aftermath of the hurricanes.

Housing Completions
This component showed gains in the latest tally in both month-to-month (1.1%) and year-to-year (10.3%). And since completions generally mirror starts, 2018 looks to continue this advance. Robert Dietz, Ph.D., the chief economist and senior vice president of the National Association of Home Builders, feels that multifamily housing construction is leveling off. For single family housing, he cautions that the downside risks: labor and lot shortages, tighter lending to builders and increased lumber prices, are larger than the upside risks in NAHB's forecast, which calls for 12% growth in both 2018 and 2019.

New Home Sales
According to the most recent monthly estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development, sales of new single-family houses were 18.9 percent above the previous month's rate and 17.0 percent greater than the same time last year. The Wells Fargo Economics Group feels that a significant turning point has been reached "where several trends that have been holding back sales and new home construction since the financial crisis will begin to unwind." This makes them optimistic about 2018 and they point to the 17-year highs in recent months of both the Conference Board's and the University of Michigan's measure of consumer confidence as evidence.

Existing Home Sales
After three months of declines, existing-home sales posted a modest gain of 0.7%, but that is still 1.5% down on a year-to-year basis. The National Association of Realtors???(R)???AE???? concludes that "ongoing supply shortages and recent hurricanes muted overall activity and caused sales to fall back on an annual basis." Lawrence Yun, chief economist for the association estimates these sales will finish the year at the best pace since 2006, but only a modest improvement (0.4%) from 2016. In 2018, sales are forecast to expand 3.7 percent. Yun cautioned that the House Ways and Means Committee's legislative proposal to overhaul the American tax code could adversely affect home sales and prices next year and beyond.

Total Construction Spending
In the latest report, the value of construction put in place inched up 0.3% on a month-to-month basis and is running 2.0% higher than last year. ConstructConnect.com expects the final tally for the year to $1.248 billion, a gain of 7.2% over 2016, and a 7.3% improvement in 2018. The latest FMI Construction Outlook puts those numbers lower, calculating that total construction spending put in place will be up 4% at year's end compared to 2016, and predicting a 5% increase in 2018 over 2017.

Total Residential Construction Spending
According to the most recent monthly estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development, sales of new single-family houses were 18.9 percent above the previous month's rate and 17.0 percent greater than the same time last year. The Wells Fargo Economics Group feels that a significant turning point has been reached "where several trends that have been holding back sales and new home construction since the financial crisis will begin to unwind." This makes them optimistic about 2018 and they point to the 17-year highs in recent months of both the Conference Board's and the University of Michigan's measure of consumer confidence as evidence.

Total Nonresidential Construction Spending
After three months of declines, existing-home sales posted a modest gain of 0.7%, but that is still 1.5% down on a year-to-year basis. The National Association of Realtors???(R)???AE???? concludes that "ongoing supply shortages and recent hurricanes muted overall activity and caused sales to fall back on an annual basis." Lawrence Yun, chief economist for the association estimates these sales will finish the year at the best pace since 2006, but only a modest improvement (0.4%) from 2016. In 2018, sales are forecast to expand 3.7 percent. Yun cautioned that the House Ways and Means Committee's legislative proposal to overhaul the American tax code could adversely affect home sales and prices next year and beyond.

Unemployment Rate
According to the U.S. Labor Dept., the most recent unemployment rate fell to a 17-year low at 4.1% as employers hired at a strong pace. The jobless rate, which changed little over the course of 2016, has dropped from 4.8% since the start of this year. The AGCA found that 70% of metro areas saw construction employment increases over the last year, and the construction jobless rate improved in 41 states.

Materials Costs
Construction materials prices rose 4.5% on a year over year basis. Anirban Basu, chief economist of Associated Builders and Contractors expects the ongoing global economic recovery to stabilize these prices in the near future. Nearly every category in the latest Engineering and Construction Cost Index showed higher prices than the previous month, which could result in higher equipment prices. Subcontractor labor costs also crept up but index participants were "cautiously optimistic for 2018."

Total Construction Spending
In the latest report, the value of construction put in place inched up 0.3% on a month-to-month basis and is running 2.0% higher than last year. ConstructConnect.com expects the final tally for the year to $1.248 billion, a gain of 7.2% over 2016, and a 7.3% improvement in 2018. The latest FMI Construction Outlook puts those numbers lower, calculating that total construction spending put in place will be up 4% at year's end compared to 2016, and predicting a 5% increase in 2018 over 2017.