In an exclusive interview for AEM, Chief Economist Ken Simonson of the Associated General Contractors of America forecasts how U.S. construction markets will fare in 2016.
Here’s his take on the year ahead:
U.S. Economic Growth Continues – The U.S. economy will grow at a moderate pace with very low inflation and gradual increases in interest rates. That’s good news for construction, Simonson said.
Multi-Family Leads the Way – Apartment construction will remain very strong while single-family construction will see close to double-digit increases. Pipelines, petro-chemical plants and gas-fired power plants will boost private non-residential construction.
Highway Bill Drives Investment – The passage of a long-term federal highway bill will encourage contractors to invest in their own fleets while strengthening equipment rental operations. Contractors will go from gloom to – if not boom – at least steady work.
Oil & Gas Market Subdued – Demand for equipment used in drilling and frack sand production will remain very weak. However, construction of downstream petro-chemical plants and pipelines will be very good for the next two years.
Fear Could Stop Growth – While there is always a risk of a major terrorist event or a series of them, the U.S. could shut itself down by cutting off immigration or rejecting pro-growth trade agreements.
“We shouldn’t allow politicians and demagogues to scare us out of the growth that should be happening,” Simonson stated.