In 2016, the growth rate of the overall construction spending in U.S. is expected to remain moderate. Over the recent years, the construction or renovation expenditure on residential property both for multi-family and single-family homes has dropped in the country following a five-year period of general improvement.
The construction sector had a sound start to the year, however, has witnessed a gradual drop since then and is expected to end the year on a similar note. Likewise, during the same period, the figures for total new privately owned housing unit has been significantly higher compared to the first quarter of 2015. It is quite evident that the housing market was sluggishly growing in the course of 2016 with all eyes on the prospective of the coming year and the inward Trump administration. On the other hand, the early signs from few of the predictable indicators of the construction industry gives very little to be excited about and chances of reacceleration are expected to be low. On the brighter note, the risk of any major set-back for the industry is quite low and is likely to register a minuscule growth over the first half of 2017.
A primary factor that can helps determine the market scenario for the next few months will be the Architectural billing index (ABI) for residential construction. An idea about the market tends can be somewhat identified by the billing rate from America Institute of Architects for commercial and residential projects. The slowdown in the ABI is directly reflecting on the dip of construction spending, the ABI is expected to further decelerate at least during the first four months of 2017. Taking account of the present market condition and providing the bleak instances of any major turnaround price drop for home construction is quite apparent during 2017.
Summary: 2017 is expected to bring limited opportunities for the Construction sector in the U.S