As we are well into 2019, understanding the economic landscape to project the type of growth within the construction industry is important as companies look to set their plans and budgets for the rest of the year. When you examine statistics like the 4.9% increase in the construction employment and a 5.5% year over year boost in spending, all signs seem to be pointing to contractors being busy well into the future. Yet, though the 3.7% unemployment rate in December 2018 was the lowest it has been in 49 years and economic indicators as of December were putting the American economy on a strong growth trajectory, the recent government shutdown is poised to derail spending on new large scale, government-funded projects.
Here are three things to stay aware of as the year progresses:
1.) Funding and the federal government. If the government shutdown starts up again on February 15th and moves well into the first quarter, economist estimate it could have shuttering effects on the private sector, including private construction projects. As the amount of consumer spending contracts, and consumers are less likely to buy new homes, seek rental properties, frequent restaurants or retail stores, then construction projects could be postponed. As the funding showdown intensifies, keep an eye on how this may affect funding of projects, even those not scheduled to begin until later 2019.
2.) The rising need for multi-family units. The rental market is quickly expanding, making apartment buildings and condos an attractive investment opportunity for real estate developers. If this trend continues, the number of multi-family projects should increase in 2019 and well into the future. This could mean a large amount of work for seasoned and reputable contractors who can handle the design, work, and management of such projects.
3.) International investment is on the rise. As foreign companies look to stake their claim on American soil, many of the upcoming 2019 construction projects may be funded by foreign investors. This can be a new source of work that may have been limited in the past. As long as the foreign investment regulations do not stiffen, this sector alone could represent a lucrative opportunity for highly-skilled contractors to guarantee themselves a steady flow of work through the year.
As it stands now, the 2019 construction outlook is strong, but as funding uncertainties continue, this outlook can quickly begin to wane. However, experienced remodeling experts and contractors are used to the ebb and flow that comes with the industry. And, if you can withstand this level of uncertainty and keep your eyes open for attractive and unique opportunities, 2019 could be a big year for contractors.