New Construction Surges but Volatile Seasonal Weather Looms Ahead
According to recent reports, spending on new construction projects in the United States was up slightly by 0.4 percent in May of this year. This increase comes in light of the figure for April being revised down significantly from the original prediction. Together, these signs indicate that the construction industry is still inconsistent and unpredictable, despite the economy.
The figures for the month of May brought total construction spending to $1.31 trillion which is 4.5 percent higher than it was in May 2017. The figure is also an all-time high for the season. On the other hand, April’s estimate was adjusted, lowered by 0.9 percent, from what was previously calculated to be an overly ambitious 1.8 percent increase.
Construction in various sectors reflects this overall movement. In May, total private construction rose 0.3 percent, residential projects increased by 0.8 percent, and new single-family home construction rose by 0.6 percent, all while the unpredictable apartment building sector shot up by 1.6 percent. Nevertheless, private, non-residential building didn’t enjoy the same increase; that sector saw a 0.3 percent dip.
The increase in construction seems to be a function, at least partly, of a shortage of available housing units. Anxious homebuyers are pushing real estate prices higher as demand for both existing and newly constructed homes rises.
According to data issued by the Commerce Department, housing statistics climbed to a seasonally adjusted annual rate of 1.35 million which is the most robust forward movement seen in over a decade, since July of 2007. The fast pace seems to be a result of a surge of building in the Midwest region.
Yet despite optimistic predictions of increased growth, unpredictable and often volatile summer weather has the potential to put a damper on new construction projects, while affecting home prices.
Intense summer storms and high winds, predicted for the season, can slow down construction projects as the conditions make many aspects of construction unsafe. For instance, workers repairing or installing a roof are at an increased risk of falls and slips that could lead to serious injuries or fatalities.
An additional problem is that severe weather can damage vulnerable work that is not yet completed or fully installed. Click here for further information on how weather can affect home construction such as the roof, gutters or siding.
When there is a delay or unforeseen damage as a result of the weather, construction projects take longer than originally planned. Moreover, thousands of dollars could be added onto the cost of the project, driving prices up even further.
Author: Jacob Maslow
