For all of 2017, total construction starts grew 3 percent to $745.9 billion, which followed a 6 percent increase reported for 2016. That's the word from Dodge Data and Analytics, which compiled the year-end data and issued a report on Jan. 25.

A strong December, up 12 percent, buoyed the Dodge Index, which had declined by the same amount in November. “After weaker activity was reported in both October and November, the December rebound for total construction starts eased the extent of the decline that took place during the fourth quarter,” said Robert A. Murray, chief economist for Dodge Data & Analytics.  “On a quarterly basis, growth in 2017 was reported during the first and third quarters, while activity retreated during the second and fourth quarters, continuing the up-and-down pattern around an upward trend that was present during 2016."

The December statistics produced a reading of 155 for the Dodge Index (2000=100), up from November’s 138.  For the full year 2017, the Dodge Index averaged 158. The 3 percent hike in construction employment relates to the entire U.S., but geographically, the industry was all over the map. The Midwest was down 8 percent for the year - the worst performing region in the nation. Also down was the South-Central, -3 percent. On the positive side were the Northeast (+17 percent), South Atlantic (+6 percent) and West +3 percent).

“The construction industry over the past two years has made the transition to a more mature stage of expansion, characterized by slower rates of growth for total construction compared to the 11-13 percent yearly gains during the 2012-2015 period,” Murray said. “For 2018, the construction expansion is anticipated to continue at a modest pace.  The tax reform package is expected to provide a near-term lift to overall economic growth, and the likely beneficiaries would be commercial building and multifamily housing.  Funding support for institutional building will come from the state and local bond measures passed in recent years.  

"Passage of a new infrastructure program at the federal level could be a plus for public works, although the impact at the construction site is likely to be felt more in 2019 than in 2018, as the program would feature incentives to boost funding from state, local, and private sources.”

While Dodge watches construction spending, the Associated General Contractors of America keeps tabs on construction employment - and that was similarly up in 2017. The AGC reported on Jan. 5 that U.S. construction employment totaled 6.99 million in December, a gain of 30,000 for the month and 210,000, or 3.1 percent, for all of 2017.

Michigan was among 42 states that saw construction jobs increase during the course of last year. Michigan's construction jobs rose by 7,400, or 4.7 percent, a ranking that placed the Great Lakes State No. 24 among the states in job gains. That ranking was helped by a strong December, wherein Michigan gained 2,100 construction jobs. Michigan had 164,900 construction workers at the end of last year.

The AGC said talked-about new federal infrastructure spending - if it ever comes to fruition - would help guarantee continued employment gains in the sector. "Construction employment is expanding in many parts of the country in large part because of strong private-sector demand," said Ken Simonson, the AGC's chief economist. "Any new public-sector investments, particularly for infrastructure projects, would help accelerate job gains in many parts of the country."

Over the course of the past year, construction hotspots included No. 1 Nevada (+12.8 percent, +10,400 jobs) followed by Rhode Island (+11.3 percent); Oklahoma (+10.7 percent) Oregon (+10.5 percent) and Alaska (+9.7 percent).

The biggest job losers were in Iowa, which lost the highest percentage for the year (-9.2 percent) followed by Missouri (-7.2 percent); North Dakota (-4.1 percent), and Connecticut and Nebraska (both -1.2 percent).
 
The construction industry traditionally keeps an eye on what the architects are doing in order to forecast the future - and for 2018, the architects like what they see.

“Overall, 2017 turned out to be a strong year for architecture firms. All but two months saw Architecture Billings Index (ABI) scores in positive territory,” said American Institute of Architects Chief Economist Kermit Baker. “Additionally, the overall strength of the fourth quarter lays a good foundation for healthy growth in construction activity in 2018.”

The ABI concluded the year in positive terrain, with the December reading capping off three straight months of growth in design billings. the December ABI score was 52.9, down from a score of 55.0 in the previous month. This score still reflects an increase in design services provided by U.S. architecture firms (any score above 50 indicates an increase in billings). The overall new design contracts index decreased slightly from 53.2 to 52.7.
A look ahead. Nationwide, 2018 looks to be another good year for construction. "Construction firms appear to be very optimistic about 2018 as they expect demand for all types of construction services to continue to expand," said Stephen E. Sandherr, the AGC's CEO. "This optimism is likely based on current economic conditions, an increasingly business-friendly regulatory environment and expectations the Trump administration will boost infrastructure investments."

A nationwide AGC survey released in January found that "respondents are very optimistic about demand for all types of construction services...."  Association officials said that 75 percent of firms say they will increase their headcount in 2018, up slightly from 73 percent last year.