U.S. Construction Industry in Best Shape Since Financial Crisis

PHOENIX, Ariz. – Rider Levett Bucknall reports that the U.S. construction industry “is in the best shape that it has been since the depths of the financial crisis,” following continued upward trends in construction activity and steady growth in the last half of 2015. The firm notes that, according to the Bureau of Labor Statistics construction unemployment is down to 6.2 percent – nearly at economic full employment – and that its research shows that activity is up in virtually all areas with the possible exception of the oil centers. The firm reported its findings in its newly released Fourth Quarter 2015 USA Construction Cost Report.

In the report, Rider Levett Bucknall cited the recent decision of the Federal Reserve Bank’s Open Market Committee to raise the target federal funds rate to a range of 0.25 percent to 0.50 percent, as an action that shows that the Federal Reserve believes the economic recovery is sustainable.

According to the U.S. Department of Commerce, construction put-in-place during October 2015 was estimated at a seasonally adjusted annual rate of $1,094.2 billion, which is 0.6 percent above the revised August estimate of $1,087.5 billion. The September 2015 figure is 14.1 percent above the September 2014 estimate of $959.2 billion. The value of construction for the first nine months of this year was $786.6 billion, 10.5 percent above the same period in 2014.

Rider Levett Bucknall tracks construction costs in 12 major U.S. cities. From July 1, 2015 and October 1, 2015 the national average increase in construction cost was approximately 1.32 percent. With the exception of Las Vegas, Nevada, each city had an increase of at least 1 percent this quarter, ranging from 0.97 percent (Las Vegas) to 1.73 percent (San Francisco, California).