Questions? Give Us a Call
(678) 940-6433

National Q3 2016 Construction Spending Highs

National Q3 2016 Construction Spending Highs

Keep up with the latest from CCR-Mag.com

Fill out the form Below

Home Vendor News National Q3 2016 Construction Spending Highs
National Construction Spending Reaches Cyclical Highs in Q3 2016
Building and materials costs break records alongside increased spendingCHICAGO, Nov. 17, 2016– According to JLL’s latest report on United States construction activity, construction spending in 2016 has continued to hit cyclical highs, reaching $317 billion in the third quarter, a one percent growth increase year-over-year. While this may be the highest point this cycle, compared to past third quarter growth averages of 7-10 percent year-over-year, the small increase could indicate an impending slowdown.A robust construction pipeline combined with rising building and materials costs and a shrinking labor pool could explain the lackluster growth. Materials costs have reached a 2.2 percent growth rate year-over-year, a five year high, largely due to a high demand for lumber. Building costs as a whole have increased in the third quarter, seeing a slow but steady rate of 2.6 percent growth year-over-year.A change in sight?
The Construction Backlog Indicator (CBI) – a tool depicting the strength in the construction industry – shows a national average of more than eight months of work ahead for contractors. Over the course of 2017, U.S. markets can expect softening construction volumes as demand and market saturation begins to level out across property types.
“The construction industry is cyclical and a national slowdown is to be expected,” said Todd Burns, President, Project and Development Services, JLL. “In 2017, industry players will be closely monitoring real estate decisions, per project staffing and tech and hardware innovations to get the most bang for their buck.”
Key themes impacting construction

  • Economic uncertainty: Although current U.S. construction volumes remain steady and growing, investors, financiers and contractors alike are beginning to approach decisions with caution, weighing risk and opportunity. Confidence indicators in the construction, development and lending industries are beginning to falter, depicting a changing mind-set as tides begin to turn.
  • Labor challenges: Record-breaking commercial construction activity along with a 4.5 percent construction unemployment rate – the lowest in over 14 years – has created a high demand, low supply scenario in terms of labor. As a result, the average hourly wage hit $29.98 per hour in July 2016, which is more than 3.5 percent higher than that of the year prior and outpaced the national average annual growth of 2.4 percent. With high construction volumes across property types and a dwindling labor pool, expect demand to remain elevated for the time being.
  • Technology boom: Construction and development has made strides to become an industry for innovation with the implementation of new productivity software, tech products such as drones and virtual reality devices, and the ever expanding sharing economy making its debut in construction. Technology has become a game changer for project managers and contractors looking to streamline processes and offer an all-in-one solution.

Sector highlights

  • Office: The office construction pipeline reached its highest point this cycle at 105.4 million square feet in Q3 2016, up 4.8 million square feet from last quarter. But starts declined by 10.6 million square feet this quarter, illustrating a possible hesitancy to begin new projects.
  • Industrial: The growth rate of industrial new project deliveries continues to increase year-over-year, as the under construction pipeline remains steady at 204.3 million square feet. Vacancy continues to decline as the sector hits 5.8 percent – the lowest rate in over 16 years.
  • Hospitality: Metrics for the U.S. hotel industry continue to suggest that the sector is stabilizing at normal levels. The supply pipeline has increased 1.5 percent year-to-date, but this growth remains below the long-term average of two percent.
  • Retail: The retail under construction pipeline continues to climb, reaching 82.4 million square feet in Q3. Starts are at their highest in the Southwest region, boasting 6.7 million square feet in the last quarter.
JLL Project and Development Services is a leader in the development, design, construction and branding of commercial real estate projects for the world’s most prominent corporations, educational institutions, public jurisdictions, healthcare organizations, industrial facilities, retailers, hotels and real estate owners. Ranked No. 3 in Building Design + Construction’s 2016 Construction Management Giants survey and No. 5 on Engineering News Record’s 2016 list of Top 100 Construction Management-for-Fee Firms, JLL’s project management team comprises 4,895 project managers across 51 countries, and is actively managing $31.1 billion under construction.
About JLL
JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate.  JLL is a Fortune 500 company with, as of December 31, 2015, revenue of $6.0 billion and fee revenue of $5.2 billion, more than 280 corporate offices, operations in over 80 countries and a global workforce of more than 60,000.  On behalf of its clients, the company provides management and real estate outsourcing services for a property portfolio of 4.0 billion square feet, or 372 million square meters, and completed $138 billion in sales, acquisitions and finance transactions in 2015. As of September 30, 2016, its investment management business, LaSalle Investment Management, has $59.7 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.
Contact:          
Kelsey Burgess, JLL
Phone: +1 312 228 3458
Email:  kelsey.burgess@am.jll.com
 

Events

Read more BELOW

 

The 2024 virtual Men’s Round Table will be held Q4, 2024, date TBD.

2024 Virtual Men’s Round Tables

2023 Virtual Men’s Round Table was held on November 7th, 2023 via Zoom.


 

2024 Virtual Women’s Round Table

2023 Women’s Round Table #1 was held on October 20th, 2023 via Zoom

News

Meijer brings its neighborhood store concept to Ohio

Meijer is expanding its smaller-format Fairfax Market banner beyond its home state of Michigan with the opening of a 40,000-square-foot store in Cleveland that offers more than 2,000 products from local vendors. Progressive Grocer

Supplements/Podcast
See Website for Details

This content (including text, artwork, graphics, photography, and video) was provided by the third party(ies) as referenced above. Any rights or other content questions or inquiries should be directed such third-party provider(s).

Receive the CCR 2024 Idustry Report

Get ahead of your Competitors with CCR's FREE Industry Insider's Report 2024!

Always stay two steps ahead of your Competitors. Stay informed with the latest in the Industry. 

This site uses cookies to ensure that you get the best user experience. By choosing “Accept” you acknowledge this and that ccr-mag.com operates under the Fair Use Act. Find out more on the Privacy Policy & Terms of Use Page