ModernMetals.com reported today that the AIA Consensus Construction Forecast “expects the industry to experience slower growth, at a rate ranging from 3.5 percent to 4 percent, for the remainder of 2017 and through 2018.” Following two years of solid growth, 2017 has not displayed the same promising growth as previously hoped. Economists cite as possible reasons for the slowdown as sluggish U.S. economic growth, general uncertainty and concerns among construction industry professionals, and certain vulnerable construction sectors (e.g. retail, industrial, healthcare and education).
However, it should be noted that while the rate of growth has pulled back somewhat, there is still growth, as evidenced by the continued and “steady pace of construction starts across the country,” according to Attilio Rivetti, Preconstruction and Procurement for Turner Construction Co, and author of the Turner Building Cost Index.
Are traditional market indicators no longer valid? Have underlying assumptions changed enough that we need to rethink how we predict upcoming recessions?