Construction Newsletter Bringing to you Innovations, Insights, and More

Proptechbuzz

10/29/2024

This week, the U.S. construction sector saw steady growth, especially in commercial and industrial projects supported by federal funding through the IIJA. Construction jobs rose by 25,000 in September, with labor shortages continuing to impact specialized trades and project timelines

Nonresidential construction added 17,900 jobs, showcasing resilience, though inflationary pressures remain a challenge. Key projects in clean energy and manufacturing continue to move forward, positioning the industry for further expansion

The construction industry gained 2.3% this week, with EMCOR Group leading the charge, rising 3.6%. Over the past year, the sector has surged by 68%, showcasing its strong performance. This growth is driven by increased infrastructure demand and advancements in construction technology. Investors are taking note of the sector’s ongoing resilience.

Looking ahead, earnings in the construction industry are forecast to grow by 21% annually. This promising outlook is fueled by large-scale projects and continued innovation in building methods. The sector’s strong fundamentals make it a prime area for potential investment opportunities.

As of October 2024, U.S. construction spending remains strong at around $2 trillion annually, up 4.1% from last year. Growth is driven by private manufacturing (especially chip and battery plants) and data centers, with nonresidential construction seeing a 57% rise in data center projects. Residential construction spending dipped slightly, with multifamily projects down 7.5%, though single-family homes are rebounding.

The labor market remains tight, with 500,000 unfilled jobs, pushing wages up. Costs have stabilized but remain 30% above pre-pandemic levels, with supply chain issues potentially impacting Q4 growth

(Here is a graph showing U.S. construction spending trends in 2024, year-to-date (YTD). It tracks total, residential, and non-residential spending from January to October.

Total spending has steadily increased, reaching $2 trillion in October.
Residential spending has seen a slight decline, while
Non-residential spending (driven by sectors like data centers) continues to rise.

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