As we plan for new construction project budgets, as well as continue to manage existing projects into 2021, it is always helpful to get a quantitative picture of where the construction industry is heading. In particular, with the all the uncertainty and disruptions of the 2020 pandemic, having some data on which to ground your project budgets is super helpful — especially where rising costs may impact the accuracy of your plan.
- Overall, construction costs are only mildly higher than last year. This article states just over 1.6% increase over the first few months of the pandemic.
- Seemingly in spite of the pandemic, there has been a year-over-year increase in construction spending. However, as detailed here, this has been mostly driven by a large increase in residential spend. Non-residential construction project spending has decreased by 0.6% YoY.
- Non-residential construction project spending is projected to drop off by over 10% in 2021 vs this year.
- The forecasted reduction in investment is fairly widespread across sectors, with the biggest reductions likely to be in Recreation and in Hotel/Motel construction.