Publisher’s
Viewpoint Mark Buckshon, publisher
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indicating experience, competence and reliability.
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new clients to do business with you.
For more information please contact:
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2 — NOV/DEC 2019 — The North Carolina Construction News
I’m sure many readers are looking forward to
the Christmas holiday break, after an intense year
with challenges associated with growth and suc-
cess – labor shortages, and competing demands
for subtrades and suppliers. As well, in the classic
combination of crisis and opportunity, the storm
damage from hurricanes and flooding has created
plenty of work for the industry – notably the $1.7
billion in military construction projects as the US
Navy rebuilds from Hurricane Florence.
Dodge Data & Analytics predicts things will
slow down somewhat in 2020. The good news is
that the economists there aren’t projecting a hard-
landing recession; in part because of all of the
work in the pipeline that has yet to start or reach
the completion stages. The slower pace may give
you the opportunity to catch your breath, though.
I’ve been watching major longer-range trends
that promise to reshape the industry, namely the
increasing importance of modular and factory-
built construction, and integrated technologically
focused design and construction systems. Artifi-
cial intelligence also will redefine much of our in-
dustry. Despite these changes, however, this is a time
of year when we can slow our business pace
somewhat, and spend more time with our fami-
lies. I will need to think how I will delegate re-
sponsibilities (or somehow manage directly the
production of the next issue), while I am in the
South Pacific and Australia/New Zealand on a va-
cation from mid-January through early March. Al-
though your holiday and vacation plans may not
be quite as adventurous, I hope you’ll enjoy the
season, and your New Year will be both happy
and prosperous.
Mark Buckshon is president of the Construction News
and Report Group of Companies, which publishes North
Carolina Construction News. You can reach him by email
at buckshon@ncconstructionnews.com.
Happy Holidays
US construction starts to slip back in 2020
but decline will not be anywhere near the
level of the Great Recession: Dodge
North Carolina Construction News staff writer
The chief economist for Dodge Data & Analytics of-
fered an outlook for the US construction industry in
2020 on Oct. 31, and his perception is that there will be
a decline in most sectors – but this slowdown will not
be a severe crash and, in part, is caused by a skilled
labour shortage.
“The recovery in construction starts that began dur-
ing 2010 in the aftermath of the Great Recession is
coming to an end,” said Richard Branch at the 81st an-
nual Dodge Outlook Conference in Chicago.
“Easing economic growth driven by mounting trade
tensions and lack of skilled labor will lead to a broad
based, but orderly pullback in construction starts in
2020,” Branch said. “After increasing 3% in 2018,
construction starts dipped an estimated 1% in 2019
and will fall 4% in 2020.”
“Next year, however, will not be a repeat of what the
construction industry endured during the Great Reces-
sion. Economic growth is slowing, but is not anticipated
to contract next year. Construction starts, therefore, will
decline but the level of activity will remain close to re-
cent highs. By major construction sector, the dollar
value of starts for residential buildings will be down 6%,
while starts for both nonresidential buildings and non
building construction will drop 3%.”
The pattern of construction starts for more specific
segments is as follows:
The dollar value of single family housing starts will be
down 3% in 2020 and the number of units will also lose
5% to 765,000 (Dodge basis). Affordability issues and
the tight supply of entry level homes have kept demand
for homes muted and buyers on the sidelines.
Multifamily construction was an early leader in the re-
covery, stringing together eight years of growth since
2009. However, multifamily vacancy rates have moved
sideways over the past year, suggesting that slower
economic growth will weigh on the market in 2020.
Multifamily starts are slated to drop 13% in dollars and
15% in units to 410,000 (Dodge basis).
The dollar value of commercial building starts will re-
treat 6% in 2020. The steepest declines will occur in
commercial warehouses and hotels, while the decline in
office construction will be cushioned by high value data
center construction. Retail activity will also fall in 2020,
a continuation of a trend brought about by systemic
changes in the industry.
In 2020, institutional construction starts will essen-
tially remain even with the 2019 level as the influence of
public dollars adds stability to the outlook. Education
building and health facility starts should continue to see
modest growth next year, offset by declines in recre-
ation and transportation buildings.
The dollar value of manufacturing plant construction
will slip 2% in 2020 following an estimated decline of
29% in 2019. Rising trade tensions has tilted this sector
to the downside with recent data, both domestic and
globally, suggesting the manufacturing sector is in con-
traction. Public works construction starts will move 4% higher
in 2020 with growth continuing across all project types.
By and large, recent federal appropriations have kept
funding for public works construction either steady or
slightly higher – translating into continued growth in en-
vironmental and transportation infrastructure starts.
Electric utilities/gas plants will drop 27% in 2020 fol-
lowing growth of 83% in 2019 as several large LNG ex-
port facilities and new wind projects broke ground.’
In his presentation, Branch provided a word graph in-
dicating that construction executives currently believe
the skilled labour shortage is their greatest impediment
to growth. However, there are other factors and risks,
including increased trade tensions and monetary policy
challenges, that could add to economic stresses in the
months ahead.
The North Carolina Construction News — NOV/DEC 2019 — 3