Although earlier in 2019 many economists expected the global economy to slow down in 2020, many contractors believe the demand for non-residential construction projects will continue to increase. The Association General Contractors of America surveyed over 1,000 contractors back in November of 2019 and learned that contractors across the country expect markets to grow in all 13 of the major construction project categories. Here are more details about the optimistic outlook for 2020 in the commercial construction industry.
Overall, 27-36 percent of the contractors surveyed expect there to be more work for them in 2020 in each category, while only 11-21 percent predict there will be less work for them this year. This suggests that most of contractors in the U.S. have an optimistic outlook about the commercial construction industry for the new year.
While the outlook was less optimistic in the Northeastern states, the general outlook for the industry was consistently positive throughout most of the states in the country. In contrast, the South had the most positive outlook of all the regions in the U.S.
Reasons for Growth
The construction industry has seen steady growth over the past five years, a trend that helped the industry bounce back from the 2008 recession. The flourishing tech sector, technological advances in construction, and heavy investments in infrastructure and renewable energy have all contributed to the growth experienced by construction firms in the country. The labor shortage and shifting U.S. trade policies both represent major obstacles for the construction industry, but contractors believe the industry will grow in spite of these challenges.
Areas of Growth
While contractors expect growth in all areas, they are the most optimistic outlook about the growth in the areas of water and sewerage, highway and transportation, k-12 education, and hospital construction. Other areas of expected growth include higher education, power, federal and public buildings, multifamily residences, retail, warehouse and lodging. With a net positive reading of 7 percent, private offices had the least optimistic outlook among contractors, though they still expect some growth in this area.
While there is some uncertainty in the economic outlook for 2020 as a few experts predict that a recession could begin this year, professionals in the construction industry expect the construction industry to continue its current trend of steady growth. Contractors are particularly optimistic about construction in the areas of sewerage, transportation, and education.
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