As I mentioned in my blog last week, I’ve recently had the pleasure of interviewing Alex Carrick, chief economist covering North America for ConstructConnect and CanaData. He has been providing the construction industry with economic and forecast data for over 30 years.
One of the highlights of the interview was talking to Alex about the outlook for the U.S. construction market. Our conversation covered all sectors of construction, from residential and civil to regional and metro-level performance.
Here are some highlights:
- Housing starts are still at about 1.1 million units per year annualized, when they should be up around 1.6 million units.
- Seniors and millennials have discovered the joys of living downtown and Alex does not see a big shift back to single-family as other people do.
- Office buildings have a great outlook given vacancy rates are about as low as they have been in eight or nine years.
- Higher education construction is being sustained by large endowment funds and successful alumnus. Also, we are seeing new research hubs coming together from partnerships between academia and enterprises.
- Hospital demand is driven by the aging baby boomer population, but the political uncertainty around healthcare makes Alex weary about what's going to happen in this sector for the next couple of years.
Alex also discusses infrastructure and how critical it is for continued growth. As you’ll hear in the video, Alex believes that investments in infrastructure are all about productivity improvements, and that the terms logistics, infrastructure and productivity enhancements have become synonymous.
Alex goes on to explain the difference between hard (roads, sewers, pipelines, etc.) and soft (schools and hospitals) infrastructure, and how the push for each largely comes down to striving for productivity enhancements.
Make sure to watch this week’s video interview to hear directly from Alex about the trends and drivers of the construction industry in the United States.