There are plenty of reasons to feel optimistic about the American economy. After years of stagnant growth in the wake of the Great Recession, unemployment is falling, housing prices are rising, and the dollar has rebounded nicely against other global currencies. Perhaps the most auspicious sign for continued economic recovery and growth is the incredible expansion of commercial construction.
In 2014, commercial building rose by a whopping 14 percent. According to the 2015 Dodge Construction Outlook, that upward trend will continue with an estimated increase of 15 percent by year’s end. Why is this happening? Let’s find out!
1. Hiring Boom
As U.S. employers continue to hire hundreds of thousands of new workers each month, they must expand their operations. It is no surprise, then, that much of the growth in the commercial building sector has been spurred by new office space in the private sector. Both large and small companies are now spending across the board, increasing their investments in new facilities.
2. Demographics
Like most developed nations, the United States has an aging population. Since older folks consume more health care than younger ones, the need for new hospitals, health clinics, and other medical facilities has never been greater. According to reliable estimates, institutional building, which includes hospitals, is expected to rise by 9 percent in 2015.
3. Energy Growth
Now the world leader in oil and gas production, the infrastructure that is needed to sustain these massive, growing industries must be updated and upgraded in the coming years. A recent estimate put the total amount of infrastructure investment needed at just over half a trillion dollars. Yes, that’s trillion with a “T!” Many of these improvements will require commercial building, both onshore and offshore.
4. GDP Rising
They say a rising tide lifts all boats. With the economy expected to grow at around 3.5 percent, many industries should reap the benefits. At present, construction accounts for around 5.5 percent of gross domestic product (GDP) — the broadest measure of economic activity. As a result, the sector should get a nice bump simply because the economy as a whole is growing.
5. Made In America
Fueled by strong growth in the automotive sector, manufacturing plant construction should continue to grow at an impressive rate. Although not quite as rapid at the 42 and 57 percent increases the industry experienced in 2013 and 2014 respectively, recent estimates remain high by historical standards. According to the aforementioned report, manufacturing plant building is expected to rise by 16 percent in 2015. Those numbers should remain in positive territory for the foreseeable future, thanks in no small part to the precipitous decline in manufacturing costs of late. Although China still makes items for a lot cheaper, producing products in the USA is getting ever more affordable.