Predicting a Record Year in Construction for 2019

//Predicting a Record Year in Construction for 2019

Predicting a Record Year in Construction for 2019

Construction spending is expected to increase in 2019 in what could be a record year for the industry. Spending growth is particularly high in construction areas related to single-family, office buildings, lodging, and recreation. Transportation, public safety, and conservation and development are expected to have the highest growth rates. Here’s a closer look at upcoming spending trends.

Public Safety

Public safety saw a 10% increase from 2017 to 2018, and this growth trend is expected to continue into 2019. Things like government spending, population growth, and the incarceration rate have contributed to the rise in public safety spending. Many public safety facilities will need improvements and renovations, especially in metropolitan areas that have high growth rates, as these facilities are becoming overcrowded.

Transportation

Government spending and increases in funding have propelled growth in transportation-related construction spending. From 2017 to 2018, transportation spending rose 13% and could increase another 8% this year. Increasing urbanization, in particular, has spurred the growth of transportation construction as this creates a demand for more connectivity.

Conservation and Development

Conservation and development construction also increased 10% in 2018. The 2018 Consolidated Appropriations Bill drove spending in this area, as did cleanup efforts in Texas, Florida, and the Carolinas following hurricane season last year. EPA budget costs, on the other hand, will limit conservation growth through 2020. Still, conservation and development growth is expected to increase by 7% in 2019.

Office

Office construction rose 9% between 2017 and 2018, accelerated by the current office vacancy rate and decreasing unemployment rates. The vacancy rate is particularly low in urban areas, such as New York City and San Francisco. Office spending in 2019 could reach $78 million in 2019. Corporate relocations and a high demand for mission-critical facilities have also had a huge impact on office spending recently.

Lodging

Lodging was up 8% last year and could reach $33 billion by the end of 2019. Income growth and decreasing unemployment have led to higher demand for leisure travel, while business travel has also increased. The occupancy rate is going up, which increased the need for both expansions and new lodging facilities. Many facility owners are also investing more in IT, analytics, and smart building technology.

While some areas like religious construction are decreasing right now, spending growth in public safety, office, lodging, transportation, and conservation and development will likely ensure that overall construction spending goes up in 2019. If trends play out as expected, 2019 could be a record year for construction. To keep up with the increasing demand for construction projects, firms are going to need more skilled professionals, and many firms will need to rethink their recruitment strategies to compensate for a continued gap in skilled labor.

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By | 2019-03-01T16:07:27-04:00 March 7th, 2019|Construction Blog|

About the Author:

The Birmingham Group has been serving the construction industry since 1967. Brian Binke took over the firm in 1995 and since that time, he has personally placed over 1200 construction managers and senior leaders, with company revenues ranging from $10 million dollars to the largest ENR 400 companies in the industry. Brian is an industry innovator, with a specialized skillset in construction. His keen understanding of business, the construction industry, and ability to effectively match and recruit top leaders has led to many accolades. He was ranked the #1 International Billing Owner in the construction industry for his own personal production and has been consistently recognized as one of the Top 10 International Billing Owners out of 800 owners worldwide. This includes owners across every industry. In 2013, Brian was awarded the #1 International Billing Owner within the entire network. For over two decades, Brian has been considered one of the most influential thought leaders in the construction industry. His business and construction knowledge are used as a resource for some of the nation’s most prominent publications. In the past year alone, Brian has been quoted in or authored articles for The Wall Street Journal, CBS News, MoneyWatch, Construction Today, ConstructionDive, United Rentals, Fast Company, Entrepreneur Magazine, American Express, Builder Magazine, and Human Resource Executive, among others. "I believe companies are a lot like sports teams. The team with the best players usually wins. It is my passion to deliver the absolute best talent to my client companies – the market’s top performers, the talent that every company wants to hire but which seldom seems available. To put it simply, I thrive on helping my clients build their Dream Team." - Brian Binke, The Birmingham Group
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