The increased activity within the industry can be attributed to the residential, commercial and educational sectors. Since 2012, construction has seen a steady increase in new starts, led mostly by residential building. As 2014 saw a five percent increase in construction starts over 2013, experts agree the increases are the result of diversification within the sector and both builders and lenders feeling as though the sector is less vulnerable to outside forces having negative economic impacts.
As is often the case in the construction industry, residential construction leads the way in new starts. However, in 2015 it is expected that multi-family housing will outpace single-family housing in new starts. Experts attribute this to the millennial generation starting to look at having a place of their own, which is helping to drive continued demand for apartment buildings.
Commercial construction, which is usually driven by new retail construction, is instead being led now by demand for office buildings. Now considered to be the driving force in commercial construction, office building construction is expected to increase by nearly 20 percent in 2015. Industries with the highest demand for new office space include healthcare, telecommunications, financial services and government services.
New construction starts in the educational sector are also increasing. Many localities have passed new school construction bonds, enabling them to have the money needed to begin projects that have been on hold for many years. Along with these projects, many public works projects are also expected to be started in 2015. Dodge estimates these projects will increase by up to five percent over 2014, allowing localities to complete work on government buildings, streets and other items that have had to wait longer than expected.
The steel industry will benefit greatly from the increase in construction, thanks in large part to increases in manufacturing construction and highway and bridge construction. Manufacturing starts are expected to increase by 57 percent, with the oil and gas industries at the forefront. With almost $119 billion in starts expected, bridge projects will get started thanks to an increase in public-private partnerships and numerous financing options that have become available.
As the demand continues in multiple areas of construction, more and more jobs are expected to be added, resulting in help for many other areas of the economy. After several years of hard times, the construction industry is looking at the year ahead with more optimism than ever before, confident that the path ahead is full of promise.