Last week, industry leaders and economists convened at Dodge Data & Analytics’ Outlook Executive Conference at Maryland’s National Harbor to roll out predictions for the U.S. economy and construction markets in the coming year. The top finding of Dodge’s report that was unveiled at the event is that total construction starts in 2019 will inch up to just over $808 billion from this year’s estimated $806.8 billion.
While a prediction that construction activity will be about the same doesn’t make for the most exciting news, what’s clear is that the economy is currently in a precarious tug and pull between growth stimuli like tax cuts and risks such as rising interest rates.
As the economy nears a tipping point to contraction, there are a few themes construction companies can anticipate and plan for, according to conference panelists, in order to both capture opportunity in the coming year and prepare for the storm ahead.
Don’t be surprised if not much changes
The economy is certainly cooling off from the elevated growth rates we’ve seen in the past several quarters, including 4.1% in the second quarter of 2018, the fastest pace since 2014.
But this decline won’t have a pronounced impact on the construction industry for at least a year to come, according to Dodge’s projections. Construction spending levels are “rounding the peak,” said Chief Economist and VP Robert Murray, but he added that, “basically, the levels of activity we’re expecting in 2019 are not that different than what we saw in 2018.”
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