Construction Outlook: up 5% in 2017; Building Construction Up 8%!

The recent Dodge Construction Outlook report produced by Dodge Data & Analytics is an interesting read. Not only does it provide some historical perspective but provides the understanding for why 2016 has been such a “market specific” economy and also shares the rationale for its 2017 projection of a 5% increase in construction. And while the outlook could be perceived as “rosy”, the dispersion of the growth is very uneven.  Where you are will again count very much as not all markets are created equal.

And if you’re a national distributor or a manufacturer, the report can provide some regional insights and can be acquired by clicking here.

Some highlights include:

• 2017 economic outlook
  • concerns about the global economy
  • moderate job growth
  • some increase in interest rates
  • commercial real estate generally healthy
  • economic growth of 2.4%
• Construction market expected to grow 5% to $713M.  This is a growth rate of more than 2x GDP
  • Key is that residential and non-residential building are both expected to be up 8%
  • Non-building construction is expected to decline 3%
  • Fortunately the electrical industry is, for the most part, focused on the building aspect (the 8%!)
• Some segment highlights, in dollars
  • Single family housing up 12%
  • Multi-family housing  projected to be flat
  • Commercial buildings up 6%
  • Institutions up 10%
    • Healthcare is projecting a 7% growth
  • Manufacturer plant construction up 6%
  • Electric utilities / gas plants down 29%
  • Public works up 6%
• The Southeast (they call is South Atlantic) and West are projected to have the strongest markets … both up 9%.

It was interesting to note that a number of large / very large projects were mentioned in the report indicating, once again, that metropolitan markets are driving demand and that the “rising tides” sales growth strategy for most markets will not work.  Business will continue to be “hand to hand” combat but companies can differentiate themselves through customer intimacy, customer outreach and solid execution.  For manufacturers, being demand creators is integral or the alternative is to be preferred by distribution.  Reps need to either “follow the lead” of their manufacturers and be at end users to gain some level of “specability” or be able to convert the business through distributor intimacy.

The good news is that Dodge is projecting growth, albeit sector and geographically specific.

Do you use tools such as Dodge in your sales and marketing efforts? Are you aware of the various tools that Dodge offers that can assist distributor sales efforts? For manufacturers?