US Construction Expenditures to Rise on Gains in Consumer Incomes, Business Investment

6/30/2021

Cleveland, OH, June 30, 2021 — US construction expenditures are forecast to advance 3.9% annually in nominal terms through 2025, according to Construction: United States, a report recently released by Freedonia Focus Reports. Construction contractors stand to benefit from continued gains in the number of households; consumer incomes; and business, nonprofit organization, and government investment following tight pandemic conditions. Faster growth will be limited by the high cost of new construction, particularly due to the high labor and land costs in many densely populated areas.

In 2021, construction expenditures are projected to rise 4.8%. Growth will partly represent a rebound from a challenging 2020, particularly for the commercial building segment. Businesses dependent upon consumer foot traffic – such as lodging and restaurants, which saw depressed revenues due to the pandemic – canceled or postponed construction projects. However, a rebound in commercial building construction is projected to begin in 2021 on rising demand for goods and services, as vaccination rates increase and consumers return to normal routines. Residential building construction is forecast to continue growing at a strong pace in 2021. Rising sales of existing homes will support growth, as improvements are commonly undertaken as a home changes ownership.

These and other key insights are featured in Construction: United States. This report forecasts to 2021 and 2025 US construction expenditures in nominal and real (inflation-adjusted) US dollars. Total construction expenditures in nominal and real terms are segmented by market in terms of:

  • residential building
    • new single-unit housing
    • new multiple-unit housing
    • improvements
  • commercial building
    • office, trade, and lodging
    • institutional
    • industrial
    • transportation
    • other commercial buildings such as public safety and recreation
  • nonbuilding
    • highways, streets, and other transportation
    • power
    • sewer and water
    • telecommunication
    • other nonbuilding construction such as breakwater systems and dams

Total expenditures in nominal terms are also segmented by region as follows:

  • South
    • South Atlantic
    • West South Central
    • East South Central
  • West
    • Pacific
    • Mountain
  • Midwest
    • East North Central
    • West North Central
  • Northeast
    • Middle Atlantic
    • New England

To illustrate historical trends, total expenditures and the various segments are provided in annual series from 2010 to 2020.

The scope of this report represents new construction and improvements such as additions, alterations, and major replacements (e.g., heating systems). Maintenance and repairs for existing structures and service facilities are excluded. Also excluded are land acquisition costs, drilling of gas and oil wells, and digging and shoring of mines.

As defined by the US Census Bureau, expenditures represent architectural and engineering costs; labor, material, and overhead costs; interest and taxes paid during construction; and contractors’ profits.

More information about the report is available at:

https://www.freedoniafocusreports.com/Construction-United-States-FF60054/?progid=91541