Recent figures show the construction industry in a very healthy state, as it has been for a few years. Nevertheless, results vary by state and sector, with some growing quickly and others falling back, so it's useful to know where to concentrate your efforts.

Recent Performance
According to the 2016 Dodge Construction Outlook, U.S. construction starts increased by an estimated 13% in 2015, accelerating from 9% growth the previous year. This continues the expansion experienced in recent years, although increases weren't constant across all sectors:

  • Non-building construction accounted for a large proportion of the increase due to starts on several new power plants and some very large liquefied natural gas terminals in the Gulf Coast region
  • Residential building grew by 18%, both for multi-family and single family housing, the latter recovering from a flat performance in 2014
  • Non-residential building reduced after growth of 24% during 2014.
Changes in the level of construction activity had variable effects on job numbers across different states:
  • Employment expanded in 35 states plus the District of Columbia to September 2015 although only 23 of those states added jobs in August and September
  • California added the most new construction jobs while Arkansas had the highest percentage increase; others to gain included Florida, Pennsylvania, Kansas and South Carolina
  • Construction employment fell in fourteen states, West Virginia losing the highest percentage and the largest losses occurring in Ohio, West Virginia, Minnesota and Mississippi.
Factors Affecting the Changes
  1. Interest rates are increasing, adding to development costs.
  2. Labor shortages in some areas are leading to higher wages rates and difficulties in resourcing projects.
  3. Increased demand is allowing better profit margins.
  4. Population increases are causing greater housing needs.
  5. Growth in the economy is creating more confidence for development.
Forecast Growth
Overall construction starts are forecast to grow 6% in 2016, less than half the rate in 2015. However, this reflects a reduction in non-building construction and, if electric power and gas plants are ignored, construction starts will increase by 10% against 8% the previous year.

Changes by sector include:
  • Single family housing increasing by 17% in units and multi-family up by 5%
  • Commercial buildings up by 11% from 4% in 2015
  • Institutional buildings growing by 9% after a 6% rise the previous year
  • Manufacturing plants falling back 1%, an improvement on the 28% fall in 2015
  • Public works expected to be static
  • Electricity utilities and gas plants forecast to decrease by 43% following the 159% jump last year.
Some important points are coming from the various figures, including that firms relying on federally-funded projects are facing some uncertainty over future work. Additionally, depending on what they do and where they are, some businesses are having difficulty finding enough work while others are facing staff shortages to meet demand. So, in order to ensure a flow of work, it's important to know where the growth is likely to be so you can focus on the best areas.