Posted November 5, 2015

Dodge issues 2016 Construction Outlook

Report predicts U.S. construction industry will grow six percent next year.

Dodge Data & Analytics has released its 2016 Dodge Construction Outlook at the 77th annual Outlook Executive Conference in Washington, D.C.

The report describes the economic environment going into 2016 as a mixture of headwinds and tailwinds, including domestic and international uncertainty on one hand and a recovering job market and ongoing economic recovery.

For 2016, total construction starts are forecast to advance 6% to $712 billion. Gains are expected for nonresidential building, up 9%; and residential building, up 16%; while the nonbuilding construction sector slides 14% following this year’s substantial jump.

If the electric power and gas plant category is excluded, total construction starts next year will be up 10%. The pattern by more specific sectors is the following:

  • Single family housing will rise 20% in dollars, corresponding to a 17% increase in units to 805,000 (Dodge basis). Access to home mortgage loans is improving, and some of the caution exercised by potential homebuyers will ease with continued employment growth.
  • Multifamily housing will increase 7% in dollars and 5% in units to 480,000, slower than the gains in 2015 but still growth. Low vacancies, rising rents, and the demand for apartments from millennials will encourage more development.
  • Commercial building will increase 11%, up from the 4% gain estimated for 2015. Office construction will resume its leading role in the commercial building upturn, aided by more private development as well as construction activity related to technology and finance firms.
  • Institutional building will advance 9%, picking up the pace after the 6% rise in 2015. The educational facilities category is seeing an increasing amount of K-12 school construction, supported by the passage of recent school construction bond measures.
  • Manufacturing plant construction will recede an additional 1% in dollar terms, following the steep 28% plunge for 2015 that reflected the pullback for large petrochemical plant starts.
  • Public works will be flat with its 2015 amount, as a modest reduction for highways and bridges is balanced by some improvement for the environmental public works categories. A new multiyear federal transportation bill is being considered by Congress, and is expected to achieve passage in late 2015 or during the first half of 2016. The benefits of that bill will show up at the construction site later in 2016 and into 2017.
  • Electric utilities and gas plants will fall 43% after the sharp 2015 jump. The lift coming from new starts for LNG export terminals will be substantially less, and new power plant starts will recede moderately.

To learn more or to purchase the full report, visit