Good news is on the construction horizon, as 2017 looks to be another year of growth and profitability for contractors. The American Institute of Architects' (AIA) semi-annual Consensus Construction Forecast, a survey of the nation's leading construction forecasters, is projecting overall 2017 construction spending increases up to 8.2%.
We've gathered information from leading industry experts to bring you our top predictions for construction industry trends in 2017.
Growing demand for new healthcare and education facilities will lead to a significant increase in institutional construction in 2017. According to AIA Chief Economist, Kermit Baker, PhD, Hon., "By far, the most significant driver that will fuel greater expansion in the marketplace is the revival in the institutional sector," which, according to Baker, accounts for a third of new building construction spending.
The economists at Freddie Mac expect interest rates to continue to trend upward into 2017. When interest rates rise, home refinancing tends to decrease. Fewer refinances could mean fewer available remodel projects. However, according to the Mortgage Bankers Association (MBA), lenders are likely to put their efforts into attracting home buyers, as opposed to refinance homeowners. The MBA expects a 70/30 split between purchase loans and refinance loans in 2017, so new residential construction will continue to see growth.
The construction industry will continue to see rising demand for green building in 2017, and more than half of all commercial and institutional construction projects will be environmentally sustainable, energy efficient, or both. IBISWorld projects 23% annual growth in the green building industry through 2017.
We will see more innovative green building materials, such as Hempcrete -- a flexible insulator made from hemp plants that is mold- and pest-resistant, and nearly fireproof. Expect more green roofs in urban areas, and more drought-resistant landscaping.
The success of Airbnb and Uber are examples of a growing trend known as the "sharing economy," where strangers rent or share from strangers in a peer-to-peer (P2P) service model. Expect to see more P2P rental services such Missouri's EquipmentShare that helps contractors borrow and lend online.
Equipment rental growth will continue to trend upward by 8.6% in 2017, and is expected to grow by 9% in 2018.
Power and hand tool growth increased by 4.8% in 2016, driven by recovering construction activity, a rebound in housing starts, and continued popularity of DIY activities among consumers. Intense price competition within tool categories should keep prices steady.
The demand for power tools will outpace that of hand tools. Innovations in power tools such as cordless electric tools, and tools integrated with new cloud-based technologies, give power tools the edge over hand tools sales. The hand tool market is limited by simple designs which leaves room for only modest improvements, and durability that leaves fewer opportunities for replacement sales.
New technological advancements in construction will continue to bring new dimension to the industry. 3D building apps such as SightSpace 3D can overlay 3D building models to scale, and allow for virtual walkthroughs.
Microsoft's new HoloLens combination headset and visor gives the wearer a holographic view of objects to scale and in real time so you can see the completed project before you even start physical construction.
The world-wide race to use 3D printing for construction is on, and 2017 should bring us 3D printed luxury villas in China (built in only 3 days), the world's first 3D printed office building in Dubai, and a 3D printed bridge in Amsterdam.
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