{"id":1004212251,"date":"2017-04-11T00:00:00","date_gmt":"2017-04-11T08:00:00","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/cpe-uncategorized\/construction-industry-finished-strong-in-2016but-whats-next\/1004212251.html"},"modified":"2020-04-06T07:11:57","modified_gmt":"2020-04-06T15:11:57","slug":"construction-industry-finished-strong-in-2016but-whats-next","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/construction-industry-finished-strong-in-2016but-whats-next\/","title":{"rendered":"Construction Industry Finished Strong in 2016\u2026But What\u2019s Next?"},"content":{"rendered":"

By Todd Burns, Americas President, JLL Project and Development Services<\/em><\/p>\n

\"Todd<\/p>\n

2016 was a record-setting year for the construction industry \u2013 with modest, but steady growth seen across all indicators and sectors. As a testament to the year\u2019s success, construction spending in the US totaled nearly $1.2 trillion<\/a> or 4.5 percent more than full year 2015 levels \u2013 nearly tripling the GDP inflation rate.<\/p>\n

Although it may have been a banner year for the construction industry, a newly elected President brought a degree of uncertainty over the last few months of the year, which has trickled over into the start of 2017. Amid ongoing skilled labor shortages in the industry, building costs saw a modest 2.7 percent year-over-year increase and lumber saw a 9.4 percent year-over-year increase in the face of this uncertainty.<\/p>\n

All eyes are on 2017 and many are wondering what\u2019s in store for the construction industry going forward.<\/p>\n

New President, new policies<\/strong><\/p>\n

A new President often times means new policies \u2013 and change. According to JLL\u2019s latest Construction Outlook<\/a>, moving into 2017, the construction industry should expect the new administration\u2019s policy decisions to greatly affect how business will be conducted throughout the year and beyond. As immigration legislation, labor laws, union policies, international trade deals and tariffs, and a hesitant industry unfold, a significant impact is almost certain.<\/p>\n

What to expect in the near term<\/strong><\/p>\n

Although presidential policies affecting the construction industry will likely get passed earlier in the year, concrete impacts won\u2019t be felt until late 2017. Regardless of when they\u2019re passed, international trade deals, import tariffs, large-scale infrastructure projects and immigration legislation could all have profound influences on how business is done.<\/p>\n

Due to the industry\u2019s ongoing skilled labor shortages, wages will continue to rise through mid-year while project timelines and budgets will continue to be negatively impacted.<\/p>\n

And with fewer construction loans requested due to some of this uncertainty, large lenders will adjust loan standards to encourage increased borrowing while still reducing risk.<\/p>\n

What to expect by year-end<\/strong><\/p>\n

By year-end, slowdowns in the Northeast and West markets will begin to weigh on the national construction industry as a whole, while national firms will turn their focus to the Midwest and South markets, which continue to see sizable construction growth partly due to a strong auto industry in the Midwest.<\/p>\n

In addition, the full effect of Washington\u2019s shifting policies will likely be felt across the nation, which could lead to some sizable problems for the industry. Materials costs may rise due to voided international trade deals and new import tariffs and labor costs may rise due to immigration reform and further wage increases. As labor and materials costs continue to rise and firms struggle to maintain sustainable profit margins, owners, developers and builders will be forced to work together differently.<\/p>\n

No need to panic just yet<\/strong><\/p>\n

Despite these potential setbacks, there\u2019s no need to panic just yet. The construction industry is still a viable and strong industry \u2013 with its three key industry indicators, National Construction Spending, Construction Backlog Indicator and Architecture Billings Index, having grown during the last quarter of 2016. And although we may be faced with some unknowns, we know that the construction and contractor backlog sits at 8.7 months of future work across the board, up 2.2 percent from the fourth quarter last year. The U.S. as a whole posted positive growth, signifying that there\u2019s no national slowdown just yet.<\/p>\n","protected":false},"excerpt":{"rendered":"

All eyes are on 2017 and many are wondering what\u2019s in store for the construction industry going forward.<\/p>\n","protected":false},"author":1277,"featured_media":1004508084,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[39372],"tags":[],"class_list":["post-1004212251","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cpe-blog"],"acf":[],"yoast_head":"\nConstruction Industry Finished Strong in 2016\u2026But What\u2019s Next? - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/construction-industry-finished-strong-in-2016but-whats-next\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Construction Industry Finished Strong in 2016\u2026But What\u2019s Next?\" \/>\n<meta property=\"og:description\" content=\"All eyes are on 2017 and many are wondering what\u2019s in store for the construction industry going forward.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/construction-industry-finished-strong-in-2016but-whats-next\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2017-04-11T08:00:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-04-06T15:11:57+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2021\/03\/Todd-Burns-low-res.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"303\" \/>\n\t<meta property=\"og:image:height\" content=\"448\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Burns\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/construction-industry-finished-strong-in-2016but-whats-next\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/construction-industry-finished-strong-in-2016but-whats-next\/\",\"name\":\"Construction Industry Finished Strong in 2016\u2026But What\u2019s Next? 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