Residential Sector Continues to Dominate North American Construction Market

PHOENIX, Ariz. – Rider Levett Bucknall recently released the third edition of its North American RLB Crane Index. The report measures construction activity in major cities across North America and predicts the health of the U. S. construction industry.

According to the new issue of the index, the residential market continues to lead construction activity in the industry. Other notable sectors that are experiencing growth and contributing to overall activity are mixed-use, commercial and hospitality projects.

The North American RLB Crane Index reports that Calgary, Canada; Denver, Colorado; Honolulu, Hawaii; San Francisco, California; Seattle, Washington and Toronto, Canada are leading activity in the residential market with a total of 194 cranes active in that sector across these six cities. In Boston, Massachusetts; Los Angeles, California and Washington, D.C., mixed-use construction leads construction activity with 111 cranes total. Portland, Oregon remains unique with 44 percent of its cranes within the commercial sector. The index further reports that:

• Denver’s construction market continues to prosper with total crane counts doubling over the last year, and activity in the residential sector accounts for 53 percent of the city’s crane count. Statewide, according to the University of Colorado Leeds School of Business 2016 Economic Outlook, a 16 percent increase in residential construction and a 9 percent increase in nonresidential construction is anticipated, while over 10,000 construction jobs are expected to be added to the Colorado market in 2016.

• In Los Angeles, 2016 will continue to be a strong year for construction. Mixed-use and residential projects account for 80 percent of development downtown. The University of Southern California has a total of six tower cranes on three major student housing projects. Seven cranes are active in Hollywood on major mixed-use, hospitality and residential projects and activity in the Beverly Hills area is ramping up with new construction and renovations, including the redevelopment of the Beverly Hilton Hotel.

• Honolulu’s residential sector accounts for around 80 percent of crane activity, followed by hospitality, commercial and mixed-use projects. Increases in construction costs have left many developers revisiting their programs, designs, and associated return on investment before committing to construction starts. Many current projects are expected to complete in 2016 and Rider Levett Bucknall foresees the city’s crane count reducing over the next six months.

• San Francisco shows an increase in mixed-use projects by 17 percent, even as residential projects continue to lead activity. The majority of cranes remain concentrated in SoMa, with new developments along Van Ness increasing in the residential and healthcare markets.

• Although Rider Levett Bucknall anticipates a slowdown of activity in Toronto over the next six months, the city is slated to add over 260 high-rise projects to its future market. Residential projects account for over 80 percent of the crane count year-to-date.

• In Calgary, residential markets are responsible for 64 percent of the city’s cranes. It is anticipated that future market growth will be affected by the fall in oil prices, resulting in a downturn in construction in the near future.

• Seattle has seen a 43 percent increase in crane counts since this time last year, led by the commercial, mixed use and residential sectors combined. Over 9,000 residential units were added to the Seattle market in the last three years. Rider Levett Bucknall expects that activity has not yet peaked and will continue to climb in all sectors.