Construction Today - Volume 16, Issue 1 - 14

ECONOMIC OUTLOOK
to economic data, the
ยป According
residential and other construction
sectors are strong.

STILL BOOMING
I

The U.S. construction outlook is as bright as it seems. BY NATHAN FISHER

n business, there is such a thing as a
"good problem to have." For those in
the construction industry who feel like
business is booming, it might be because they find themselves declining to bid
on good projects, grappling with work/life
balance or struggling to hire enough of the
right staff. But is the current U.S. construction boom just a feeling, or is the outlook as
strong as it seems? According to economic
data and your peers in the construction
industry, the answer for now is yes.

Residential Trends
We have a variety of reasons to believe the
U.S. construction outlook is likely to remain
strong. Figure 1 summarizes the findings of
the Fisher Investments research team when
it comes to residential projects. According
to the research, recessions tend to follow periods of declining residential construction.
The blue line representing homes under

14

CONSTRUCTION-TODAY.COM VOLUME 16, ISSUE 1

construction has continued to rise since the
end of the most recent recession, indicating
positive growth for the industry.
While these broad trends are encouraging, that may be too macro for some to
feel confident that a downturn isn't just
around the corner. A plausible place to look
for early indicators of a housing construction downturn would be high-end luxury
homes. "The past four years, have been the
best four years of my thirty-year history as
a builder, and I see no end in sight," says
Earnie Carrere, President/Owner of Carrere
General Contractors Inc., a luxury homebuilder in Hobe Sound, Florida.
Carrere, who also remodels golf course
club houses, says his pipeline looks good
through 2019, but he also notes that "people
cancel projects all the time." That begs the
question: How might you know when a
downturn is eminent? In Carrere's experience, "when anybody can stop whatever

they were doing before and become a
contractor, and when banks will lend to
anybody, then you know the market is
getting too hot." However, that is not what
he sees happening now. "Today, architects
are inviting us to help develop budgets and
construction schedules for projects that are
well-funded, well-marketed, and properly
planned," he adds.

Non-Residential Outlook
Fisher Investments' research, summarized in
Figure 2, suggests that U.S. non-residential
construction likely also has room to run.
Looking only at data from the U.S. Census
Bureau (the blue line), it looks like there
might be a downturn for non-residential
construction, but that does not paint a complete picture. This data has a nine-month lag,
but data collected by the architectural billing
index (a survey of architectural professionals, represented by the gray line) shows


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Table of Contents for the Digital Edition of Construction Today - Volume 16, Issue 1

Contents
Construction Today - Volume 16, Issue 1 - Cover1
Construction Today - Volume 16, Issue 1 - Cover2
Construction Today - Volume 16, Issue 1 - 1
Construction Today - Volume 16, Issue 1 - Contents
Construction Today - Volume 16, Issue 1 - 3
Construction Today - Volume 16, Issue 1 - 4
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