FMI’s Construction Outlook
FMI’s forecast, the FMI Construction Outlook, predicts an increase of 4% for total construction put in place for 2017 and an increase of 5% in 2018.
The primary growth segments in 2018 are expected to include residential, commercial, lodging, office and manufacturing—all with forecast growth of 5% or more. Most other segments are likely to grow roughly with the rate of inflation and may therefore be considered stable. Sewage and waste and water supply are the only segments expected to decline in 2018.
Forecasts for key sectors include:
- Lodging — Up 5% for 2017, lodging construction is coming off several years of strong double-digit, year-over-year growth since 2012. Supply is outpacing demand, causing increasing vacancy rates.
- Office — Up 9% for 2017 to $73.4 billion. Still seeing positive growth, but moderating after double- digit gains during the past three years. Slowdown in high-tech development of office space is the primary drawback on forecast growth.
- Commercial — Up 10% for 2017. Several traditional brick-and-mortar retailers closing stores in large numbers. Continued rise in e-commerce as a percent of retail sales driving demand for warehouse and distribution center construction.