Garrett Andrews//February 4, 2016//
Construction spending last year in the U.S. hit an eight-year high, with growth expected to continue through 2016.
were released Monday by the Commerce Department and they show a slight gain over November but overall another huge year for construction. Around $1.1 trillion worth of work was performed 鈥 or about 10.5 percent more than 2014. It’s the most since 2007 and the housing crash.
鈥淚 think the U.S. economy is fundamentally strong,鈥 said Ken Simonson, staff economist for Associated General Contractors. 鈥淧eople think that because we’ve seen growth for about six years, it should be time for a slowdown. Well, I don’t see anything natural about an expansion.鈥
Residential construction had risen for six years prior to the crash, before falling for five straight years. It now has risen for three, including 8.1 percent growth last year. Most of that came from multifamily rental properties, as opposed to condos, which haven’t boomed since the Great Recession.
Private construction jumped 9.9 percent in 2015, and public rose 3.9 percent.
Closer to home, the number of construction workers in Oregon rose from 80,700 in 2014 to 82,200 last year (the Commerce Department doesn’t track state-level construction spending, but economists often use employment as a proxy to gauge the industry’s health, Simonson said). Despite this growth in employment, the number of construction workers in Oregon is far from the 2006 peak of 102,000.
One factor driving growth is demand for multifamily units. Occupancy in the Portland-Vancouver, Wash.-Hillsboro metropolitan area has risen each month since December 2014. And over the past five months, rents in Portland have risen faster than those in any other metro area tracked by data firm .
Only a shortage of skilled tradespeople is slowing growth in construction, Simonson said. Firms are prevented from taking on additional projects because they simply don’t have enough workers.
The year ahead will be more 鈥渃onsumer-led,鈥 Simonson said, with somewhat more government spending 鈥 though a possibly tough climate for the manufacturing and agricultural industries and exporters. Add small but real increases in take-home pay, and the economic outlook is positive overall, and for construction as well, he said.