Towards the end of last year, ConstructConnect, the Association of General Contractors of America (AGC), and the American Institute of Architects (AIA) presented a webcast entitled 2018 Construction and Design Outlook: Cheery or Dreary? During this webcast, economists Alex Carrick (ConstructConnect), Kermit Baker (AIA), and Ken Simonson (AGA) gave their insights and forecasts for 2018. They predicted that while spending in the construction sector will remain strong this year, the amount of growth will be less than in 2017.
● Ken Simonson predicts a 2% to 7% increase in construction spending this year, with private residential seeing the most growth. According to Simonson, the biggest uncertainty is spending in the construction sector.
● Carrick predicts that e-commerce will continue to drive down growth in the retail construction sector. While there are less shopping malls and retail outlets, the number of warehouses that are constructed will remain strong to accommodate internet shoppers and the required logistics that are needed.
Forconstructionpros.com also interviewed a few experts in the industry about the construction trends and forecasts. When asked about the costs of raw materials such as asphalt, cement, steel, and lumber, Anirban Basu, chief economist at the Associated Builders & Contractors, said that he expects a rise in prices.
“Given the expectation that the global economy will heat up even further in 2018, one would expect that materials’ prices will continue to rise. However, the rise in materials’ prices could be quite gradual. Quantity supplied is already responding to higher prices in many categories, which should translate into more gradual price increases in general,” said Basu.
Simonson agreed with Basu’s comments.
“Materials’ costs ended a year-long slide in late 2016 and rose at a moderate rate in most of 2017. Those increases are likely to accelerate a bit further in 2018 as global demand picks up and construction continues to grow, albeit slowly and unevenly. I don’t foresee a return to the severe, widespread escalations and occasional shortages that cropped up before the last recession,” said Simonson.
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