U.S. Construction Spending Grew to $1.1 Trillion in 2015, Highest Level Since Great Recession
By Leopardo Construction on March 23, 2016
Leopardo Companies, Inc.’s 2016 Construction Economics Report and Outlook is an essential guide to help business leaders, healthcare administrators and government decision-makers understand the factors that impact construction costs.
This year’s report shows that 2015 was a turning point for commercial real estate construction, as spending reached the highest level since the Great Recession and even the pace of growth accelerated more than in previous years, reveals the report.
By the end of 2015, total spending on U.S. construction grew 10.5 percent to $1.1 trillion, the largest year-over-year gain since 2007. The most dynamic growth was in the private sector, where construction spending expanded 12.3 percent, compared to just 5.6 percent growth in public-sector projects.
“With a steadily growing economy, low national vacancy rates and historically low interest rates, companies are seeing this period as the right time to expand or relocate their facilities to accommodate growth,” said Jim Leopardo, CEO of Leopardo. “We’re seeing healthy construction volume of nearly every property type, both nationally and in the Chicago area.”
Key findings in the report include:
– Multifamily construction has grown by 29.4 percent annually since 2011, driven by a movement of renters by choice in urban work-live-play areas. In the same period, single-family home construction increased 14.8 percent annually.
– Office construction spending grew by 22 percent in 2014, driven by job growth in the tech sector. This growth spurt is expected to scale back to an average 5.9 percent annual growth rate through 2019.
– Construction jobs grew 7.8 percent in the Chicago area, outpacing the national average of 4.2 percent in 2015. In 2014, Chicago’s 3.2 percent construction job growth lagged the national average of 5.7 percent.
Download the full 2016 Construction Economics Report and Outlook for free.