The United States Construction Databook Series released its first-quarter update for 2021, which paints a promising outlook for the country’s inventory issues. The report forecasts the U.S. construction industry to grow by more than 15% in 2021, despite pandemic-induced challenges.
Economic shutdowns and supply chain disruptions jeopardized operations and construction schedules over the course of the pandemic. Additionally, contractors were hit because subcontractors were not able to report to jobs. Although construction continued in several parts of the country, shortages in labor and supplies contributed to lengthy delays. The decline in the output of the construction sector is also reflected in the real Gross Domestic Product (GDP) of the United States, dropping at a rate of 32.9%. The report notes that the U.S. faced its worst economic contraction in the country’s history due to the COVID-19 pandemic.
Today, the unemployment rate is still a struggle for the country and consumer confidence is still below pre-covid levels. The infection rate is also resurging in several states, curbing plans to reopen economic activities. However, stimulus checks from the government have offset some of these uncertainties, so the outlook for the residential sector is better than previously estimated.
Low mortgage rates, limited existing inventory, and government protection against forbearance and foreclosure are expected to offer support for market recovery. Several construction projects are underway to help resupply the economy, including projects in the residential, institutional, industrial, and infrastructure sectors.
To kickstart the movement towards recovery and rebuilding the nation, Tesla recently bought 381 acres of land in Austin, Texas. The $1.1 billion manufacturing project will offer much-needed assistance for the growth of the industrial buildings sector.
Another big company, Ferrero North America, announced its plan for constructing a new chocolate manufacturing unit in Illinois. This will be the company’s first production plant located in North America with a total investment of $75 million. Construction activities are due to begin by Spring 2021.
The shortage of healthcare centers has been an issue prior to the pandemic. However, now that hospitals are overcrowded, several institutions have announced their plan to expand levels of capacity. Children's Hospital of Philadelphia is planning to spend $3.4 billion on the construction of a 22-story inpatient tower, adding 300 beds and around 200 rooms if required. The inpatient tower is expected to cost $1.7 billion and is likely to be operational by 2027. Additionally, they are planning to add three more buildings.
Additional healthcare facilities are being built, such as $1.79 billion Ohio State’s Wexner Medical Center in Columbus, $1.74 billion Harborview Medical Center in Seattle, $1.6 billion Indiana University Health in Indianapolis, $1.2 billion UCSF Helen Diller Medical Center in San Francisco, $1 billion Brooklyn Hospital Center in New York City, $1 billion City of Hope National Medical Center in California, and $1 billion Mount Sinai Beth Israel in New York City.
In the infrastructure sector, the construction activities of the Class A logistics park in Texas will be a key project in 2021, which is expected to occupy 826,000 square feet. Additionally, construction of the 144MW Pflugerville Solar Project in Texas has also begun.
According to the fourth quarter 2020 Global Construction Survey, the construction industry in the U.S. is expected to grow by 15.6% to reach $1,515,659.4 million in 2021. Furthermore, the construction industry is expected to grow steadily over the next four quarters with growth momentum also expected to continue. The construction output in the country is expected to reach $1,819,106.1 million by 2025.
To read the full Q1 2021 update on the United States Construction Industry Databook Series, click the link or visit http://www.researchandmarkets.com.
