US Construction Expenditures to Rise on Gains in Consumer Incomes, Business Investment

Recovery from challenging pandemic conditions in some segments to boost growth

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Jul 01, 2021, 10:11 ET

CLEVELAND, July 1, 2021 /PRNewswire/ -- US construction expenditures are forecast to advance 3.9% annually in nominal terms through 2025, according to Construction: United States, a report recently released by Freedonia Focus Reports. Construction contractors stand to benefit from continued gains in the number of households; consumer incomes; and business, nonprofit organization, and government investment following tight pandemic conditions. Faster growth will be limited by the high cost of new construction, particularly due to the high labor and land costs in many densely populated areas.

In 2021, construction expenditures are projected to rise 4.8%. Growth will partly represent a rebound from a challenging 2020, particularly for the commercial building segment. Businesses dependent upon consumer foot traffic – such as lodging and restaurants, which saw depressed revenues due to the pandemic – canceled or postponed construction projects. However, a rebound in commercial building construction is projected to begin in 2021 on rising demand for goods and services, as vaccination rates increase and consumers return to normal routines. Residential building construction is forecast to continue growing at a strong pace in 2021. Rising sales of existing homes will support growth, as improvements are commonly undertaken as a home changes ownership.

These and other key insights are featured in Construction: United States. This report forecasts to 2021 and 2025 US construction expenditures in nominal and real (inflation-adjusted) US dollars. Total construction expenditures in nominal and real terms are segmented by market in terms of:

residential building

new single-unit housing
new multiple-unit housing
improvements

commercial building

office, trade, and lodging
institutional
industrial
transportation
other commercial buildings such as public safety and recreation

nonbuilding

highways, streets, and other transportation
power
sewer and water
telecommunication
other nonbuilding construction such as breakwater systems and dams

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

South

South Atlantic
West South Central
East South Central

West

Pacific
Mountain

Midwest

East North Central
West North Central

Northeast

Middle Atlantic
New England

To illustrate historical trends, total expenditures and the various segments are provided in annual series from 2010 to 2020.

The scope of this report represents new construction and improvements such as additions, alterations, and major replacements (e.g., heating systems). 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.

More information about the report is available at:

https://www.freedoniafocusreports.com/Construction-United-States-FF60054/?progid=91541

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: