Improving Forecast in Residential Construction, Service & Repair
Feb. 9, 2016
According to PHCC’s economic expert Elliot Eisenberg, 2016 is likely to look much like 2015, although construction activity is strengthening.
In residential construction, housing starts should rise by about 12 percent, with home prices and a lack of inventory giving home builders added incentive to build. In a new report – “U.S. Markets Construction Overview” – FMI Corporation supports Eisenberg’s predictions, claiming that, notwithstanding recent turmoil in the oil and gas markets, “construction opportunity remains strong in the right places.” The report also offers some insights about the trouble on the horizon industry experts could see back in 2008, when “construction put in place domestically peaked at $1.32 trillion” … and when they expect a return to those numbers.
Also, as Eisenberg references in his report, home remodeling activity is looking to gain steam through mid-year. According to the Leading Indicator of Remodeling Activity released by the Joint Center for Housing Studies of Harvard University, annual spending growth for home improvements will accelerate from 4.3 percent in the first quarter of 2016 to 7.6 percent in the third quarter. “2016 is looking to be a stronger year for home renovation activity compared to 2015 thanks to the continued recovery in the owner-occupied housing market,” says Chris Herbert, managing director of the Joint Center for Housing Studies. “In most markets across the country, rising house prices are bringing more homes to the market and increasing sales, which is a large driver of home improvement activity.”
“U.S. Markets Construction Overview” provided with permission from FMI Corporation. For more information, visit www.fminet.com.