US commercial construction market growth to slow
Published by Lucy Stewardson,
Editorial Assistant
World Cement,
Commercial buildings play an important role in the US construction industry, accounting for around 17% of the country’s total construction activity in 2018. However, the pace of growth is set to decelerate over the coming five years amid the decreasing demand for new retail buildings projects across the US. This is according to GlobalData.
The data and analytics company estimates that growth in the commercial construction market will decelerate to an annual average of 3.3% in 2019 – 2023, down from 13% between 2014 and 2018.
“In recent years, growth of retail buildings construction has eased, owing in large part to the changing way the US consumers are now shopping through e-commerce giants such as Amazon and eBay,” said Dariana Tani, Economist at GlobalData. “With consumers now able to compare product prices and shop online, retailers’ pricing power is being undermined. More high street shops are closing down, being converted to new self-storages, or sold to developers for other purposes.”
Nevertheless, the increasing demand for lodgings, offices, and data centres across the country is expected to support the overall growth of the commercial construction market in the next five years.
“Tech giants such as Google, Apple, Facebook, Microsoft, and Amazon are encouraging significant investment in offices and data centres throughout the US, as well as lodgings and housing to accommodate the influx of workers,” Tani continued.
In February 2019, Google announced that it will spend US$13 billion in 2019 on data centres and offices across the US, noting that the investment will create thousands of new construction jobs in the states outside of its traditional base of California, including in Nebraska, Nevada, Ohio, Texas, Oklahoma, South Carolina, and Virginia.
Apple is also investing US$1 billion in new offices in Austin, Texas, while Amazon has announced plans to spend US$5 billion on two new headquarters in New York and Virginia, as well as plans to generate more than US$2 billion in tax credits and incentives.
GlobalData is currently tracking over 4700 US commercial projects in the construction pipeline, worth more than US$1.3 trillion. A large share of these projects are part of mixed-use developments that also comprise a residential, institutional, and infrastructure component.
Read the article online at: https://www.worldcement.com/the-americas/27082019/us-commercial-construction-market-growth-to-slow/
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