WASHINGTON — Associated Builders and Contractors (ABC) chief economist Anirban Basu, American Institute of Architects (AIA) chief economist Kermit Baker, and National Association of Home Builders (NAHB) chief economist David Crowe predicted continued construction industry growth in 2016 during a joint economic Web forecast.
“The nonresidential construction sector gained momentum over the last year and should continue to expand into 2016,” said Basu. “The construction industry has benefited from increased stability stemming from low materials prices and greater certainty regarding federal budgeting and monetary policy, although a lack of appropriately skilled labor will remain a challenge for contractors. ABC predicts the nonresidential construction segment will experience 7 percent nominal growth in 2016.”
“Led by tremendous demand for energy-efficient spaces, spending on home improvements is on track to reach an all-time high by year’s end,” said Baker. “The office and retail sectors are expected to lead the commercial real estate market in 2016 with near-double-digit increases in construction spending expected.”
“We expect the residential construction sector to continue its gradual recovery as we head into 2016,” said Crowe. “Steady employment and economic growth, along with attractive mortgage rates and home prices, will keep the sector on an upward trajectory as we go forward; however, persistent headwinds, including labor and lot shortages, will continue to hinder a more robust recovery.”
Each economist discussed present and future indicators for sector performance, including ABC’s Construction Backlog Indicator (CBI) and Construction Confidence Index (CCI), AIA’s Architecture Billings Index (ABI) and Consensus Construction Forecast (CCF), and the NAHB/Wells Fargo Housing Market Index (HMI).
An archived version of the Web conference is available at http://bit.ly/1HZyAmS.
Publication date: 12/7/2015