CHICAGO—US construction starts are expected to increase 3% for dollar volume of $765 billion in 2018, although building sectors related to commercial real estate will decelerate, Dodge Data & Analytics said Thursday. The firm's latest Construction Outlook report was presented at its 79th annual Outlook Executive Conference here.
While single-family residential starts are expected to grow 9% in dollar volume and 7% in units next year, multifamily will retreat 8% in dollars and 11% in units to 425,000, or half the projected number of single-family homes projected to launch construction in '18. Dodge says multifamily's strength appears to have peaked in 2016 and has begun to wane, given slight deterioration in market fundamentals and a more cautious tone sounded by lenders.
Dodge projects a 2% increase in commercial building next year, following a 3% gain this year and continuing a slowdown in growth after the 21% spike experienced in '16. Moreover, the gains will not occur across the board: while office and industrial both are expected to see further growth, store construction will remain weak, and hotel starts will continue pulling back from a peak reached last year.
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