The economy is in recovery, and construction projects are buzzing with the renewed activity that higher demand is bringing. Loosening credit is allowing people to line up mortgage financing, higher consumer demand is calling for more commercial construction projects to be started, and an expanding tax base is allowing many localities to finance a number of much-needed infrastructure projects that have gone begging in recent years. The main drivers of this recovery are worth knowing if you're a builder looking to plan your next career move.
Residential construction projects, as measured by permits granted and new starts reported, reached a peak in the pre-recession month of September 2005, and since the crash they haven't risen to anywhere near the record set in that month of over 2 million new housing starts. January 2014, however, was not a bad after-crash month. The 602,000 new single-family starts in that month are actually a slight decline from December 2013's numbers, but still represent a 2.4-percent increase in the year-over-year trend from January 2013, which was itself the start of a bumpy year for the construction industry.
Assuming the US experiences a continued economic recovery, the progress that's been made lately in the residential building industry can be expected to go on as it has for the last several years—slow and unsteady but making inexorable progress. As more jobs and higher wages become available to more people, specifically middle-class homeowners, long-neglected repair and maintenance work can be expected to pick up as customers finally have the money to finance essential building projects on their properties.
The news is similarly mixed for new commercial construction projects. While the industry at large did experience a 16 percent drop in January, relative to December 2013, much of that has been attributed to the unexpectedly cold weather that made many of the proposed construction projects more expensive to get underway. January's drop, in other words, is expected to be temporary and to fully reverse when the spring thaw comes. It's worth noting that office construction projects are up by 21 percent for the month, an increase that's partly attributable to ground breaking on major corporate campuses across the US and a $450 million oil refinery to be built in North Dakota.
The news from the construction industry obviously isn't the euphoria of 2005, but the building trades are now starting to be busier than they have been in years. New building projects are underway in many cities and states, and industry analysts are projecting continued advances across construction disciplines. Perhaps best of all, new construction projects have historically been an indication of an expanding economy, which is good news for everyone.
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