Q4 2023: Construction Industry updates

“Over the last 12 months, construction starts have essentially froze as rates increased and credit tightened.” -Richard Branch, chief economist for Dodge Construction Network

Regionally, total construction starts in September fell in the Northeast, Midwest, South Atlantic and West, but rose modestly in the South Central.

[fig 1]

Total construction starts (based on all projects that broke ground starting in September 2023) are down slightly from the summer (Q2) of this year. Economists agree that a return to growth in construction starts is still some time away. [1]

Interest rates will remain high until at least summer 2024. Until then, risks remain in the construction market and flat construction starts are expected in the first quarter of 2024. Once we get into summer 2024, we will see growth in the construction sector. [2]

ABI September 2023: Architecture firm billings decline sharply

[fig 3]

The American Institute of Architects (AIA) created an Architecture Billings Index (ABI) which is an economic indicator for nonresidential construction activity, with a lead time of approximately 9–12 months. [3]

[1] Roepke, A. (Ed.). (2023, October 18). Construction starts drop 6% as fewer megaprojects move forward. Dodge Construction Network. https://www.construction.com/total-construction-starts/construction-starts-drop-6-as-fewer-megaprojects-move-forward/

[2] YouTube. (2023). Construction Starts - September 2023. Dodge Construction Network - Richard Branch. Retrieved November 10, 2023, from https://www.youtube.com/watch?v=Eo3EBCnpYd0.

[3] Abi September 2023: Architecture firm Billings Decline Sharply. The American Institute of Architects. (n.d.). https://www.aia.org/pages/6680261-abi-september-2023-architecture-firm-billi