According to a Dodge Data & Analytics,construction starts should continue to increase in 2022. A significant number of those starts are projects that have been on hold.
The analysis is, however, contingent on three factors.
- That each subsequent wave of the COVID-19 pandemic impacts the economy less.
- That the war stays within Ukraine’s borders and significantly abates by next year.
- That the Federal Reserve can raise interest rates to combat inflation without pushing the U.S. economy into recession.
Economists are least sure about the third factor, indicating the probability of a recession within the next is unfortunately good.
Supply chain problems continue in the construction industry. The price of construction materials jumped nearly 20% in 2021, severely affecting builders.
Dodge data is measured in dollar amounts, not projects, meaning inflation is literally "inflating" some of the numbers. Meaning, the report is likely more accurate at a five to seven percent increase rather than 14%.
Regardless of how the data is interpreted, the good news is construction starts have increased.
Nonbuilding construction starts, which include bridges, streets, highways, utility plants, gas plants and water supply systems, fell 4% in April.
