America is one of the biggest construction markets worldwide. Construction projects were stalled because of the Great Recession, but now they are progressing. One of the reasons that the construction industry is growing is the residential market’s positive trends. Here’s a quick outlook on what to expect in the future of construction.
Over a forecast period of 2019-2024, the United States is expected to have a 4.2% compound annual growth rate. There was a downturn in the construction industry in 2017 because it decreased by 1% in real terms compared to the 5% growth from the four years before that. The decline of the government’s outlay on the significant infrastructure projects and lack of non-residential buildings construction activity are part of the reason. Construction growth increased significantly in 2018, primarily from the residential sector.
Over the forecast period of 2018-2022, it is expected that the United States’ construction industry will have positive growth. It is due to the revamping of depleted infrastructures by the government. Over the same forecast period, the construction industry’s private and public sector investments in educational, healthcare, commercial, and residential infrastructure projects will help support the industry’s growth. The growth helps create more jobs for people, such as those who work in concrete construction in Salt Lake City.
Of course, the growth with vary in different areas of construction. Not all sectors of construction will have fantastic growth in 2020. For instance, amusement and recreation construction may not get a lot of projects throughout the year. However, residential construction will boom due to the increasing and aging American population.
While the current growth outlook for the construction industry looks good, there are still risks that people should know. National economic uncertainty and regulatory and political uncertainty are added risk factors that one must take into account. Rising material costs, along with interest rates, can be an issue as well when it comes to funding projects. Building materials will also rise in price because more construction firms will need more materials – therefore, higher demand will increase the cost of supply.
The labor shortage is one of the most significant risks that the construction industry will face. The supply of experienced and skilled workers is getting very tight. The baby boomer generation of construction workers will retire soon, and not many young people want to enter the construction industry. Any skilled workers are quickly hired by construction firms, which leaves other companies with a less experienced task force.
There will always be risks in any industry, so it would be best to proceed with caution. As the construction industry grows throughout the forecast period, the opportunities for projects will increase. However, the risk here is taking any project that is offered to you. That is why many construction firms prefer to focus on specific areas of construction to make sure that the client is satisfied. For instance, a construction firm that specializes in industrial construction would not accept a project that creates residential homes.
The construction industry is expected to have a decent amount of growth, given that the construction firms make wise decisions and calculate the risks.