The Direction of Construction in 2018

In 2018, it is expected that Real Gross Domestic Product (GDP) growth will be 2.1%, unemployment rate will further improve to 4.6%, and inflation will be 2.3% in the United States

Construction is expected to grow almost 5% in 2018, a bit higher than in 2017.  Single-family will experience the most growth at 9% and Multi-family will start its decline with a 1% drop. Education and Public Buildings will both grow 6%, leading the 4% increase that will be seen with Non-Residential. Non-Building is forecasted to grow 4%, led by growth in the Roads and Bridges end-market (6%).

Geographically, the South and West will experience the biggest growth in 2018, with 6% and 5%, respectively.Among the five largest states, Texas is forecasted to have the strongest growth at 10%. Three states are expected to have declines in 2018: New York, South Dakota, and Nebraska. 

Overall constructions costs are expected to increase 3% in 2017 and to increase another 2-3% in 2018, led by 3-4% higher construction labor costs. Material costs are forecasted to increase 2-3% in 2018. Gypsum products are expected to experience the largest price increase (6-7%) in 2018, followed by Cement, Aggregates, Concrete, and Lumber all in 3-4% range. 

Current home ownership rates are have been dropping for the last 15 years. There has been a lot of focus on multi-family apartments and homes for lease, which are a popular choice among younger generations.

Landaval’s potential clients are those interested in developing around Austin and San Antonio, Texas. This area has seen important growth in construction prices, residential construction, urbanization and more. For efficient construction that tackles the growing demand, clients will need to focus on affordable development options, balancing the public’s price affordability with the developers profit.