Dive Brief:
- According to an analysis from the Associated Builders and Contractors, 30 states saw an uptick from 2014 in their 2015 contributions to gross domestic product, bringing total private construction industry value to 3.9% of GDP — up 0.1% from 2014.
- The state that kicked in the most GDP value was North Dakota at 7.6%, followed by Hawaii (5.9%) and Montana (5.8%). The states contributing the least were New York (3.1%), Connecticut (3.1%) and Delaware (3.2%).
- Construction's impact on GDP has varied from 1999 to 2015 — 9.4% in 1999 to 5.1% in 2010 — but has always played a significant part in the U.S. economy, according to the ABC. The association added that costs related to construction — furnishings for completed buildings, factory equipment, spent worker pay — translated to an extra 2%-3% for the economy.
Dive Insight:
Markstein Advisors conducted the analysis for the ABC, and President Bernard M. Markstein said that investment in the hotel, office, manufacturing and multifamily segments is driving construction industry growth and that consumer spending is leading the postrecession recovery.
Despite the encouraging news from the ABC, the most recent Architectural Billings Index report from the American Institute of Architects indicated a volatility that AIA Chief Economist Kermit Baker said was largely due to the uncertainty surrounding the upcoming U.S. presidential election. Although still in the positive range, the July Index reading fell a little more than a full point from June.
Following along with the "so-so" nature of the ABI, the Commerce Department reported this month that construction spending was down 0.6% in June, which is the third straight month that metric has lost ground. In addition, Dodge Data & Analytics reported last month that the value of June construction starts fell 7% to a seasonally adjusted annual rate of $595.1 billion.
Returning to a more positive note, late last year, Global Construction Perspectives and Oxford Economics forecast that global construction output would rise 85% to $15.5 trillion by 2030, with the U.S. recovery, particularly in the Southern states, as a lead driver. U.S. News & World Report said that although it seems the U.S. is "still mostly a shell of its former self," the report indicated America would be a major force in the "global construction renaissance."