At a virtual event titled “Connected Construction at Work” earlier this month, Viewpoint and Dodge Data & Analytics collaborated to forecast the positive-looking future of construction while featuring advancements in technology and strategy that can help the industry rebound from its down year in 2020.

 

Steve Jones, senior director of industry insights and research for Dodge, presented several graphics comparing the construction economy’s performance after the Great Recession in the late 2000s, its current state amid the Covid-19 pandemic and projections for performance and resurgence in 2021 and beyond.

 

Construction starts were down 9%, from $856 billion in 2019 to $778 billion in 2020, Jones said, and though that drop represents a lot of business, construction starts suffered even more in 2008 and 2009, plummeting 13% and 24%, respectively, due to the collapse of the housing market bubble.

 

Even better is Dodge’s forecast for the next two years for construction starts: a 4% increase in 2021 and an 8% rise in 2022.

 

“What we believe is there’s going to be across-the-board recovery from the pandemic,” Jones said.

 

He also pointed to the warehouse sector as an opportunity for growth.

 

Due the recession, warehouse construction starts plummeted from $13.4 to $3.8 billion in 2010; yet thanks to the ecommerce’s meteoric rise in the past decade, the sector rose to $30.4 billion in 2019 – and actually continued to increase by 6% in 2020 (and will keep growing by 8% in 2021, according to Dodge’s forecast).

 

Jones said the warehouse industry is no longer just about keeping a roof over people’s goods, as companies such as Amazon have ramped up the ubiquity and utility of its fulfillment centers, and the warehouse subsector now makes up 30% of the commercial sector.

 

Other key statistics and predictions:

S commercial building starts dropped 24% in 2020, but Dodge is projecting a 6% uptick in 2021 and a 10% jump in 2022

 

Although office building starts dropped 22% in 2020, they are expected to rebound by 8% and 10% in 2021 and 2022, respectively, assisted by a 40% increase in data center construction in this year

 

Jones explained that President Joe Biden’s American Jobs Plan, which is pending a vote in the U.S. Senate, could help accelerate construction’s resurgence, especially with nonbuilding starts (made up of the highway, civil construction and infrastructure work proposed in Biden’s plan).

 

Even before the legislation passes, Dodge is forecasting nonbuilding starts to rise by 5% in 2021 and 6% in 2022, despite a 12% decrease in the sector in 2019.

 

With the American Jobs Plan’s scope and funding up for debate and compromise, Jones said that though it’s possible a less expensive and smaller bill ends up being the final product, any infrastructure investment will help.

 

“Even a limited bill will have a major impact,” Jones said.

 

Viewpoint’s Anne Hunt walked through the company’s Quarterly Construction Metrics Index, which painted a similarly optimistic image of construction in 2021 and beyond.

 

According to Hunt, heavy highway and civil projects had 10% more pending projects in March 2021 than March 2020, the month the pandemic first hit the U.S.

 

In terms of labor, hiring has been a net positive in 2021 so far – though it’s 12% lower than the same point last year – and the hiring figure could rise in summer months, which is typical for construction.

 

Finally, Trimble’s Jon Fingland spotlighted technology’s role in pushing construction forward past the economic downturn of 2020.

 

“There is still a lot of disconnection in construction today and a lot of areas that are inefficient,” Fingland said.