US Construction Expenditures to Reach $1.6 Trillion in 2021

Contractors stand to benefit from continued gains in household incomes and nonresidential investment

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Sep 22, 2017, 11:21 ET

CLEVELAND, Sept. 22, 2017 /PRNewswire/ -- US construction expenditures are forecast to reach $1.6 trillion in 2021, according to Construction: United States, a report recently released by Freedonia Focus Reports. Contractors stand to benefit from continued gains in the number of households; household incomes; and business, nonprofit organization, and government investment. Residential building construction is projected to outpace growth in nonresidential building and nonbuilding activity, maintaining its position as the largest segment.

More information about the report is available at https://www.freedoniafocusreports.com/Construction-United-States-FF60054/

Construction spending as a percentage of GDP is expected to regain some of the ground lost over the 2006-2011 period. In 2021, construction expenditures are forecast to represent 6.9% of GDP, up from 6.5% in 2016 but below the 8.7% peak registered in 2006. Residential building activity was overheated in 2006 and 2007, preventing a quick return to those historical peaks.

Among the four major geographical regions, construction spending in the South and the West is projected to slightly outpace expenditures in the Midwest and the Northeast due to faster population and GDP growth.

These and other key insights are featured in Construction: United States. This report forecasts US construction expenditures in nominal and real (inflation-adjusted) US dollars to 2021. Total expenditures in nominal and real terms are segmented by market in terms of:

single-unit residential
multiple-unit residential
residential improvements
office and commercial building
institutional building
industrial building
transport building
other nonresidential buildings such as public safety and recreation
highways, streets, and other transportation
power
sewer and water
telecommunication
other nonbuilding construction such as breakwater systems and dams

The scope of this report represents new construction and improvements such as additions, alterations, and major replacements (eg, heating system). Maintenance and repairs for existing structures and service facilities are excluded. Also excluded are land acquisition costs, drilling of gas and oil wells, and digging and shoring of mines.

As defined by the US Census Bureau, expenditures represent architectural and engineering costs; labor, material, and overhead costs; interest and taxes paid during construction; and contractors' profits.

Total expenditures in nominal dollars are also segmented by region as follows:

South Atlantic (South)
West South Central (South)
East South Central (South)
Pacific (West)
Mountain (West)
East North Central (Midwest)
West North Central (Midwest)
Middle Atlantic (Northeast)
New England (Northeast)

To illustrate historical trends, total expenditures and the various market segments in nominal and real terms, as well as the assorted regional segments in nominal terms are provided in annual series from 2006 to 2016.

About Freedonia Focus Reports
Each month, The Freedonia Group – a division of MarketResearch.com – publishes over 20 new or updated Freedonia Focus Reports, providing fresh, unbiased analysis on a wide variety of markets and industries. Published in 20-30 pages, Focus Report coverage ranges from raw materials to finished manufactured goods and related services such as freight and construction. Additional Building Products reports can be purchased at Freedonia Focus Reports or MarketResearch.com.

Analysis is intended to guide the busy reader through pertinent topics in rapid succession, including: