We are asked often for our opinion about where the construction market and general economy stand, and it’s part of the reason we came up with this report. What’s interesting about this year is our answer really depends on which part of the market we are addressing. This inspired the title for this year’s report of Up, Down, or Sideways.
Up, Down, or Sideways
Taking a look at the construction industry, there is a stark divergence between the public and private sectors. Construction starts for residential have declined for the past two years and non-residential building declined in 2024. Those two sectors are forecast to grow over the next four years with residential construction posting double digit increases in three of those years.
Civil engineering, on the other hand, has experienced double digit growth in starts from 2022 to 2024, and while that sector is forecast to continue to grow, it is expected at a much more modest pace. This growth is likely being driven in part by the federal infrastructure funding, which is helping that sector continue to expand.
Conclusion
The question mark for the construction industry lies in the broader U.S. and global economies. While the U.S. appears to be on reasonably good footing, China is dealing with major struggles in their property market, debt levels, and a significant drop in foreign investment as nations find other places to produce their goods. This combined with the escalations in the Middle East and the Russia and Ukraine war leaves a lot of uncertainty.
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