Top Items from the 2013 Dodge Construction Outlook

Matt Shelly
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McGraw-Hill Construction releases the Dodge Construction Outlook each year to help construction professionals make better decisions when it comes to placing competitive project bids. The health of the construction industry depends on the unemployment rate, consumer price index, and other economic factors, so the information in this report is essential for construction professionals who need to bid on single-family, multifamily, commercial, and industrial projects. These are just some of the highlights found in the 2013 version of the Dodge Construction Outlook.

The report contains good news for residential construction professionals due to the stabilization of home prices, low interest rates on mortgages, and a reduced number of foreclosures. Data from the report suggests the dollar value of the single-family housing market will increase by 24 percent during 2013. This construction growth will correspond to an increase of 615,000 units. Construction industry experts also expect the multifamily housing market to grow, but the construction growth in this market will be slower than it was in 2011 and 2012. This is partially due to the favorable view real estate investors have of multifamily properties. The mid-year update to the Dodge Construction Outlook indicates new construction starts should increase by 6 percent in 2013.

Commercial building is an integral part of the construction industry, so construction professionals pay close attention to the commercial data in the Dodge Construction Outlook. In 2012, experts predicted a 5 percent gain in the commercial building industry. The outlook is better in 2013, with experts estimating market growth of 12 percent. Retailers will need to upgrade their existing stores, and hotels and warehouses will have lower vacancy rates in 2013. Office construction will not experience as much growth as other sectors because lenders scrutinize these deals carefully. Although growth is expected in the commercial building sector, the dollar value of the market will still fall more than 40 percent below the peak experienced in 2007.

One area of the construction industry that will likely experience little growth in 2013 is the institutional building sector. In 2012, experts predicted a steep decline in institutional building. This sector should level off in 2013 as health-care facilities rebound from last year's drop and college and university construction stabilizes. The number of K-12 education buildings will continue to slip. Manufacturing construction declined in 2012, but it is expected to grow by 8 percent in 2013. Public works construction is also expected to experience a slight decline due to federal spending cuts affecting some projects.

The construction industry has made some positive progress since the slump of 2008 and 2009, but there is still work to be done. The Dodge Construction Outlook shows residential and commercial instruction to be good bets this year, but institutional building and public works construction are expected to decline. As a professional in the construction industry, you must pay attention to the data in this report when creating bids for different types of construction projects.

(Photo courtesy of khunaspix /


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