REPORT: US construction solid and stable; presidential election seen as influence for 2017
November 7, 2016.
Rider Levett Bucknall’s widely anticipated Third Quarter 2016 USA Construction Cost Report puts the complete spectrum of construction sectors and markets in perspective, as it assesses the current state of the industry
PHOENIX, AZ—In its latest quarterly survey of U.S. construction costs, international property and construction cost-consultant firm Rider Levett Bucknall (RLB) reports that construction spending in the United States is on track to increase approximately 6% in 2016. Overall, the national average increase in construction costs for the quarter was approximately 1.5%.
Julian Anderson, President of RLB in North America, said, “In our new report, we see continued positive news for the health of the construction industry, a slight uptick in the rate cost escalation and a sharp decrease in the rate of construction unemployment. Looking ahead, barring a Democrat sweep of the Presidency and Congress, we do not see any big, near-term changes in either private sector or public sector construction activity”.
Outlook for the construction industry looks positive
While current spending is falling short of the robust 20% growth seen by select segments of the industry in 2015, the outlook for the construction field as a whole is reasonably favorable. Continued low interest rates, rising consumer confidence, and healthy job growth also contribute to the guarded optimism.
Going forward, RLB sees a 5% expansion in construction spending for 2017. Based on a recent consensus forecast by the Urban Land Institute, the firm notes that past gains in activity may start to slow, suggesting the latter stages of a real estate cycle. National economic growth has been slower than previously anticipated, in part due to increasing national and international vulnerabilities. Combined with weakened domestic manufacturing output and investor uncertainty pending the results of the U.S. presidential election, these conditions may begin to create downward pressure on the construction industry in 2017.
About the RLB Quarterly Construction Cost Report
RLB reports on the comparative costs of construction in 12 US cities on a quarterly basis, indexing them to show how costs are changing in each city, as well as against the costs of the other 11 locations. Together with additional international and national cost compendia, the cost research equips clients with complete and relevant information to assist in business decisions.
With a network that covers the globe and a heritage spanning over two centuries, Rider Levett Bucknall is a leading independent organisation in cost management and quantity surveying, project management and advisory services.
Our achievements are renowned: from the early days of pioneering quantity surveying, to landmark projects such as the Sydney Opera House, HSBC Headquarters Building in Hong Kong, the 2012 London Olympic Games and CityCenter in Las Vegas.
We continue this successful legacy with our dedication to the value, quality and sustainability of the built environment. Our innovative thinking, global reach, and flawless execution push the boundaries. Taking ambitious projects from an idea to reality.