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Total Starts Forecast Grows To 5 Percent in 201711-02-16 | News

Total Starts Forecast Grows To 5 Percent in 2017

The residential sector is expected to increase 8 percent, with the single-family segment rising 12 percent in dollar terms and 9 percent in total number of units, Dodge Data and Analytics has forecast in its 2017 Dodge Construction Outlook.

Total construction starts are forecast to rise 5 percent next year to $713 billion, with the residential sector climbing 8 percent, Dodge Data and Analytics said its 2017 Dodge Construction Outlook.

Single-family housing will rise 12 percent in dollars, corresponding to a 9 percent increase in units to 795,000, according to Dodge Data's forecast.
"Access to home mortgage loans is improving, and some of the caution exercised by potential homebuyers will ease with continued employment growth and low mortgage rates," said Robert Murray, chief economist for Dodge Data and Analytics. "Older members of the Millennial generation are now moving into the 30-to-35-year-old age bracket, which should begin to lift demand for single family housing."

Multifamily housing will be flat in dollars and down 2 percent in units to 435,000, Dodge Data said in its annual report.

"This project type now appears to have peaked in 2015, lifted in particular by an exceptional amount of activity in the New York City metropolitan area, which is now settling back," Murray said. "Continued growth for multifamily housing in other metropolitan areas, along with still generally healthy market fundamentals, will enable the retreat at the national level to stay gradual."

The 5 percent rise in combined starts follows gains of 11 percent in 2015 and an estimated 1 percent in 2016, the Dodge report states.

Commercial building is expected to increase 6 percent on top of the 12 percent gain estimated for 2016.

Institutional building should advance 10 percent.

Manufacturing plant construction is anticipated to grow 6 percent.

Public works construction should improve 6 percent.

Electric utilities and gas plants is predicted to fall 29 percent after a 26 percent decline in 2016.

"On balance, there are a number of positive factors which suggest the construction expansion has room to proceed," Murray said. "The U.S. economy in 2017 is anticipated to see moderate job growth, market fundamentals for commercial real estate should remain generally healthy, and more funding support is coming from state and local bond measures."

As seen in LASN magazine, November 2016.