U.S. construction trends and outlook (Q1 2016)

May 17, 2016

Economic struggles from far away affect our own built environments more as the world becomes more interconnected.

Although the United States had success in recovering after the financial crisis, several economic headwinds are dampening the global recovery. These issues include:

  • A reduction in investment, driven in part by low interest rates and the threat of deflation
  • Political and economic uncertainty and unrest in various regions, including the refugee crisis and political change
  • Stagnant productivity and employment growth
  • Low commodity prices, especially in powerhouses like China and in oil producing countries

In a global import and export economy, those issues listed above will affect business demand, and in turn construction demand, in the United States. Many large multinational corporations are having to consider future income streams when deciding where to invest in capital expenditures. Consumers are dialing back spending, forcing retailers to come up with new and exciting ways to attract and retain loyal customers. The upcoming presidential election has businesses wary, as they weigh the pros and cons of each candidate.

Despite these concerns, the United States construction industry saw a strong first quarter, with projections of steady, albeit lower level, growth in Q2. Even though developers and occupiers are proceeding with caution, they continue to build. And as we keep monitoring the global economy, it is important to remember the construction industry lags the broader economy one to two years, giving vigilant experts ample opportunity to asses portfolio strategy in advance of any economic stagnation.

See our past construction reports here

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