The subsequent recovery has of course been most welcome, but it has been a jagged and unsteady increase over the past seven years. Now the construction industry forecasts for 2018 are starting to roll in, and it's looking like more of the same hesitant momentum for the industry, which has seen growth but not exactly a rip-roaring string of strong years that often happen after recessions. 

As we reported in our last issue, “the U.S. construction industry has moved into a mature stage of expansion,” said Robert A. Murray, chief economist for Dodge Data and Analytics. "After rising 11-13 percent per year from 2012 through 2015, total construction starts advanced a more subdued 5 percent in 2016," with an anticipated rise of 4 percent this year.

And this from the Nov. 14 edition of Construction Connect: “Out to 2021, residential will be the main driver of total construction starts, recording year-over-year increases of nearly 6.0 percent or more,” said Chief Economist Alex Carrick. “Nonresidential building will disappoint, with gains of only about 2.0 percent each year. Engineering will be strong in 2018 and 2019, as energy initiatives and infrastructure work are promoted by Washington, but will then moderate in 2020-21.”

It has only been seven short years since the low point of the Great Recession - for the U.S. construction industry it took place in January 2011, when total spending dropped to $791 billion. Since 2000, the high point for construction spending took place in 2006 and then again in the summer of 2017, when spending reached $1.2 trillion, according to the Census Bureau. 

Mark Zandi, chief economist for Moody's Analytics, told the National Association of Home Builders in November that the nation's economic expansion is "in its eight birthday this month. At eight years long it's the third longest (expansion) in history, and soon will be the second, and prospects are pretty good that it will be the longest in history." (A record 10-year expansion ended in the early 2000s).

In the overall economy, Zandi said "the economy is performing well and prospects are good...through the end of decade we're in pretty good shape."

Indeed, the overall economy is pointed in the right direction. Zandi said overall layoffs are at a record low, with only 4.3 percent unemployment. Wage growth, stagnant for years, is finally accelerating and is at 3.5 percent. "And there's now a record number of open job positions, over 6 million, and a fair share of them are in construction," Zandi said. 

But for the U.S. construction, while the caution flags aren't out, no one wants to hear that the industry's expansion is "mature" and is approaching old age. But it's looking like future growth is going to continue to be a bit restrained.

*"A dip in public works combined with a substantial decrease in utility work, weak industrial markets and slower-than-anticipated growth in residential construction all put a damper on general construction growth in 2017," says the Engineering News Record. "The consensus among economic forecasts analyzed by ENR indicates a very modest rebound in growth in 2018."

* FMI Corp., which provides management consulting to the engineering and construction industry, said it expects total construction spending put in place for the U.S. to increase 4 percent in 2017 compared to 2016. For 2018, FMI forecasts a 5 percent increase in total construction spending over 2017.

*The American Road & Transportation Builders Association forecast that total spending for highway construction will fall from $60.5 billion in 2016 to $56.7 billion in 2017. ARTBA’s forecast calls for a slight increase in 2018, with spending totaling $57.8 billion.

*Another key subcategory in construction - represented here by the Portland Cement Association (PCA) - expects annual cement consumption to climb by 2.6 percent by the end of 2017, and 2.8 percent in 2018. The PCA said the forecast "adjusts downward" their projections from earlier this year. "Bad weather and lower anticipated budgets for the public construction sector are among the factors that have prompted the adoption of a more modest growth outlook," the group says.

“Once infrastructure and tax reform initiatives take hold and affect economic and construction activity, then we can expect growth in cement consumption to accelerate to higher levels,” said Ed Sullivan, PCA senior vice president and chief economist.

The Home Builders association predicts that residential construction will continue a slow growth pattern, reaching 903,000 in 2018, increasing from an estimated 840,000 this year. The association says it sees a continued slowdown in multi-family housing through 2020. There were 393,000 multi-family starts in 2016, and that is expected to fall this year to about 356,000, dropping to a forecasted 338,000 in 2019.

Perhaps the biggest unanswered question is President Trump's pledge to push a $1 trillion infrastructure plan to upgrade all manner of highways, bridges, waterworks and buildings across the nation. Nothing has happened in that direction in 2017, and there is zero indication that infrastructure is on Trump's lineup card for 2018. "One significant wild card in the next three or four years, and that's our president's fiscal policy," Zandi said. "I think it's up in the air what policy gets done here."