Report: U.S. Construction on Growth Path

October 28th, 2016 by Editor

The U.S. construction industry, which began retracting in 2006, finally recovered in 2012 and registered a growth rate of 3.5 percent in real terms, according to a new study from Timetric, a business-information service based in London. The recovery has continued through 2015, and it’s expected to remain in place into 2020, with investments in housing projects, infrastructure construction, healthcare, manufacturing and educational facilities driving growth.

The industry’s output value in real terms is expected to rise at a compound annual growth rate (CAGR) of 3.34 percent over the forecast period, up from 3.12 percent during the review period (2011–2015).

Through affordable housing programs such as the Community Development Block Grants (CDBG), the U.S. Department of Agriculture Housing Assistance program, the Neighborhood Stabilization Program (NSP) and the Housing Choice Voucher Program, the government aims to build affordable houses for low- and middle-income people. According to the report, government increased total spending on Housing and Urban Development (HUD) programs by 4 percent, from $47 billion in 2015–2016 to $48.9 billion in 2016–2017.

In terms of the number of building permits and their total value, the report says there is clear evidence of improvement in residential construction, according to the latest data from the U.S. Census Bureau. The total number of building permits issued in the country grew by 12.4 percent from 1.1 million in 2014 to 1.2 million in 2015. This was preceded by annual growth rates of 6.2 percent, 19.4 percent and 32.9 percent in 2014, 2013 and 2012, respectively.

The report also says government spending on infrastructure will also drive overall construction growth. For example, the government plans to invest $10 billion on Amtrak and other rail programs, $12 billion on mass transit system and $1 billion on road safety programs. The government also encourages research and innovation in transport infrastructure for rural and urban areas where the construction of a standard transport system is difficult.

For more information about the Timetric report, click here.

 

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