Both Dodge Data and Analytics (Dodge) and Associated Builders and Contractors (ABC) released reports this week that predict 2021's construction industry positives and negatives.
ABC breaks down nonresidential construction by sectors and shows a 5% decrease in national nonresidential construction spending over last year, despite a 0.9% rise in January. Of the sixteen sectors analyzed, nine saw increases in spending, most from public spending (up 1.9%), not private (up 0.4%). Of these nine, only four reported growth over this time last year.
The four growth sectors, all public infrastructure, are highway and street, public safety, water supply and sewage, and waste disposal. The five categories that increased in January but did not surpass last year's growth were: conservation and development, manufacturing, health care, communication, amusement and recreation, and lodging and recreation.
Although lodging made the cut with a 0.5% increase in January, it is down a staggering 23% since last year.
The report also cites seismic and permanent changes in corporate remote work; commercial spending remains soft for the foreseeable future, both in office space and retail.
Dodge Data and Analytics discloses similar sentiments but with a more optimistic tone. Although the country sits at a 22% decrease from this time last year, Dodge expects the stimulus bill and vaccination rollouts to bring construction back to pre-pandemic levels as early as mid-year.
ABC mentions that single-family housing has driven the commercial market down 17%, with the overall construction market down 5%.
"At the end of 2021, we expect to be down just 4% in constant dollars from where we were in 2019; but again, that's due to the strength of the residential market," Richard Branch, chief economist at Dodge, said. "The infrastructure sector won't return to normal 2019 levels until 2023."
"Certainly, an infrastructure program would be a massive positive for this industry," Branch said. "There's certainly bipartisan support for boosting highway and bridge funding."
Both ABC's and Dodge's reports align on their data, but light shines at the end of the tunnel. The big question is: will construction-industry recovery come sooner? Or later?