- Single family housing will advance 28% in dollars, corresponding to a 24% increase in the number of dwelling units to 640,000 (McGraw Hill Construction Dodge basis). The inventory of new homes for sale is currently very low, which should spur more construction, and home prices are heading upward. The recent increase in mortgage rates has raised concern, but rates remain near historic lows and have not significantly affected affordability for most potential homebuyers.
- Multifamily housing will climb 23% in dollars and 20% in units, helped by the gains reported for occupancies and rents over the past year. Major metropolitan areas such as New York continue to see groundbreaking for large apartment projects, along with the re-emergence of large condominium projects.
- Commercial building will grow 15%, after the 11% increase reported for 2012, although this year's level of activity in dollar terms will still be 39% less than what was reported during the 2007 peak year. The pace of store construction is picking up, joining earlier gains registered by warehouses and hotels. The increase for office construction will remain relatively subdued in 2013, as more privately financed office projects are countered by fewer government office buildings.
- The institutional building market will slide an additional 5%, after falling 10% in 2012. While state fiscal health has shown some improvement, state and local budgets remain tight, further dampening school construction. Uncertainty related to hospital mergers and the implementation of the Affordable Care Act is restraining construction of healthcare facilities.
- The manufacturing building category will drop 8%, as firms hold back on plant investment given the sluggish U.S. economy and slow export markets.
- Public works construction will rise 3%, helped by growth for highways and bridges. The transportation sector was largely exempt from the federal spending cutbacks under the sequester, and the current year is seeing a number of large bridge projects reach the construction start stage.
- Electric utilities will see a 40% plunge in the value of new construction starts, following the record high that was achieved in 2012 which included the start of two large nuclear facilities. With new generating facilities coming on line and capacity utilization rates dropping, the near term is seeing downward pressure on new power plant construction.
New Construction Starts To Climb 6% In 2013, Says McGraw Hill Construction
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