Dodge predicts slow growth for US construction
02 December 2020
US construction will increase 4% to US$771 billion in 2021, according to the latest forecast from Dodge Data & Analytics.
This prediction was reported in the 2021 Dodge Construction Outlook at the company’s 82nd annual Outlook Executive Conference on 19 November.
According to the report, 2020 saw US construction value dip 14% to US$738 billion.
“The Covid-19 pandemic and recession has had a profound impact on the US economy, leading to a deep drop off in construction starts in the first half of 2020,” said Richard Branch, chief economist for Dodge Data & Analytics. “While the recovery is underway, the road to full recovery will be long and fraught with potential potholes.”
Uncertainty about more Covid-19 infections in the winter and a delayed fiscal stimulus from the US government will lead to a slow and jagged recovery in 2021, the report said. However, once stimulus legislation is passed and a vaccine is approved and widely distributed, consumer confidence should rise.
Specifically, the report is projecting small improvements in the dollar value of starts for residential buildings (5%), nonresidential buildings (3%) and nonbuilding construction (7%), with the residential sector the only area exceeding its 2019 level, thanks to historically low mortgage rates benefitting single-family housing.
Dodge is bullish on electric utilities and gas plants, which should gain 35% in 2021. The sector is expecting groundbreakings for several liquefied natural gas export facilities, as well as more wind energy sites.
Some sectors will see little growth or even experience further setbacks in 2021, according to Dodge. Institutional construction starts will increase by only 1% as state and local government budget deficits affect the need for public building projects, and education construction will decrease even more next year.
In April, Dodge reported total construction starts in the US had declined 5% from February to March to a seasonally adjusted annual rate of US$746.9 billion.