Select Construction Markets Booming Despite Political and Pricing Volatility
Economic and geopolitical uncertainties are affecting nearly every construction market sector, but customers are moving key projects forward in spite of them, according to the latest Market Conditions Report from DPR Construction.
“Just about every market is facing its own unique headwinds in addition to things like inflation, supply chain and labor challenges, and election year jitters,” said Matt Murphy, DPR’s core markets leader. “At the same time, owners can’t afford to take a wait-and-see approach on critical projects. Working with contracting and design partners now to ‘control the controllables’ will lead to more predictable costs and outcomes.”
The brightest spot in the U.S. among DPR’s core markets is the Advanced Technology sector, where data centers and advanced manufacturing facilities are booming. The emergence of artificial intelligence and continued growth of the Cloud is fueling data center projects as well as cooling technology innovation, especially as the industry faces an energy supply crunch. Government incentives and other efforts to “on-shore” manufacturing are powering investment in new advanced manufacturing facilities. In both sectors, collaboration to help drive speed-to-market and manage labor pools are key to project success.
Other key market sector trends noted in the report include:
- Commercial – Owners and developers that have been on the sidelines now see the next two years as the best chance to purchase bargain-priced real estate. With Class-A “trophy” office space showing resiliency, DPR leaders anticipate a trend of adaptive reuse to help level-up lagging properties.
- Healthcare – As providers tackle cascading industry changes, the current economic landscape necessitates new real estate strategies for health systems as they manage cash and affect sustaining change. DPR recently detailed four trajectories systems can take that will have ramifications for upcoming capital projects.
- Higher Education – Student housing and highly technical research spaces are in focus as universities aim to keep pace with projected enrollments and advancing technology. On the athletics front, conference realignment and name/image/likeness money is changing the game for campus facilities.
- Life Sciences – After two years of stagnation, DPR leaders see clear market growth ahead, especially given the backlog of FDA applications and approvals. While excess capacity from the commercial market will absorb a lot of new startup demand, R&D lab space requirements are changing. Planning with capital project partners is critical to managing these shifts.
“The last several years have shown that, even when there are headwinds, proper planning with project partners unlocks great results,” Murphy added. “We’re focused on understanding the unique pressures each customer faces and helping them develop capital project plans that help them achieve their business needs no matter what comes next.”
To learn more about emerging trends in key construction markets and see how top indices are trending, explore DPR’s interactive market conditions dashboard.
