Q1 Construction Industry Update – Slowing Growth Thus Far:
2023 was a banner year for construction growth as the industry generated a record $2.101T in revenue. Year-over-year (YOY) growth was 14.1%, which is the highest YOY mark (mainly due to the 23.2% increase in public construction) since the US Census Bureau started to publish put-in-place construction data (1993).
Q1 has shown a reversal of this trend, with revenue trending down to $2.083 as of March 2024. In February 2024, 15 of the 17 construction sectors showed negative growth, and private and public markets are getting hit alike. The explanation for this reversal might be explained by the runoff of low interest rate-related backlog. To wit, total starts for residential units have trended from 1.8M in early 2022 to 1.3M in early 2024. In terms of non-residential building construction, starts dropped 16% from January 2024 to February 2024 (Dodge). Nonbuilding construction (mainly public construction) dropped less precipitously, with starts dropping 3% between January and February (Dodge). While the overall drop in revenue through Q1 is slight (less than 1%), it might be a bellwether for flat growth this year, or simply a sign of mean reversion that follows a record year.
Discover the detailed analysis and insights on the Q1 2024 construction industry trends and their implications for future growth by visiting our Economic Analysis page.
