FMI Forecasts Continued Growth in Construction for 2017
FMI Corporation has released its latest construction forecast, the FMI Outlook, in a new streamlined format, designed to improve user experience and access to important data.
FMI’s Q3 2017 forecast predicts an increase of 4% for total construction put in place for 2017 and an increase of 5% in 2018.
The primary growth segments in 2018 are expected to include residential, commercial, lodging, office and manufacturing — all with forecast growth of 5% or more. Most other segments are likely to grow roughly with the rate of inflation and may therefore be considered stable. Sewage and waste and water supply are the only segments expected to decline in 2018.
The score for the third quarter Non-Residential Construction Index slipped two points to 58.8 but maintains a level of optimism for construction spending in 2018.
Forecasts for some key sectors:
Lodging — Up 5% for 2017, lodging construction is coming off several years of strong double-digit, year-over-year growth since 2012. Supply is outpacing demand, causing increasing vacancy rates.
Office – Up 9% for 2017 to $73.4 billion. Still seeing positive growth, but moderating after double-digit gains during the past three years. Slowdown in high-tech development of office space is the primary drawback on forecast growth.
Commercial — Up 10% for 2017. Several traditional brick-and-mortar retailers closing stores in large numbers. Continued rise in e-commerce as a percent of retail sales driving demand for warehouse and distribution center construction.
