- ConstructConnect released its second-quarter forecast Thursday and revised 2017 starts projections down from an increase of 7.4% to 4.8%.
- The downward move is a result of weaker-than-expected starts activity in the first quarter, as well as failure on the part of the Trump administration to get traction on its proposed tax reform and infrastructure spending agendas.
- ConstructConnect said 2017's weak performance thus far relative to 2016 leaves a window for increased government stimulus spending. Despite uncertainty regarding the infrastructure sector, the group raised its projections for the civil engineering category from 8.0% to 8.9% for 2017.
Senate Democrats proposed a $1 trillion direct-spending infrastructure bill earlier this year, but Republicans reiterated that they would not support a massive stimulus measure. House Democrats just this week introduced an $85 billion plan featuring direct spending as well, but, on the same day, a bipartisan group of Senators proposed a $10 billion bill that would create an infrastructure bank to draw private investment and support $300 billion in public construction.
President Donald Trump might already have impacted U.S. construction, according to ConstructConnect, but not all in a positive way. U.S. hotel performance is strong, but some developers have expressed concern over how immigration policy might impact foreign visitors' decisions to come to this country. Also in flux is planning for medical facilities given the uncertainty around healthcare reform.
In its latest starts report, ConstructConnect found the value of April nonresidential construction starts fell 7.2% from March to April, deviating from the typical seasonal monthly bump of 12%. That decline was led largely by the commercial category, which plummeted 35.4% month-over-month, and the industrial sector, which fell 72% between March and April.