Overall construction starts are expected to rise 7% in 2024, following a 1% increase in 2023, Richard Branch, chief economist at Dodge Construction Network, said during the 2024 Dodge Construction Outlook presented on Nov. 17. The 2023 increase will bring total starts to an estimated $1.124 trillion, with $1.206 trillion forecast for 2024.
In the residential sector, Dodge predicts single-family construction will end this year down 12%, measured in units, before climbing 3% in 2024. Branch notes that while the bottom for single-family starts has passed, mortgage rates need to ease before the sector will see stronger growth. Multi-family work is expected to follow a similar pattern, dropping 13% by the end of 2023, with a 3% increase in 2024.
The dollar value of starts in the commercial sector, which includes stores, offices, warehouses, hotels and parking, are expected to fall 6% to $156 billion in 2023, then another 2% to approximately $153 billion next year. Branch attributes this due to warehouse construction, previously strong due to the rising popularity of online shopping, entering a cooling off period. “I hesitate to call this an economic downturn,” Branch said, but rather a “recalibration” necessary after “one player [steps] out.”
After an astounding 217% increase in 2022, manufacturing will fall slightly by the end of this year, at a rate of 5%, before increasing 16% in 2024, Dodge predicts. The increase is “not a surprise, considering the impact of the CHIP and Inflation Reduction Acts,” said Branch.
Non-building starts, still bolstered by the Infrastructure Investment and Jobs Act (IIJA), are up 25% in 2023 and expected to increase an additional 7% in 2024. In the transportation sector, both bridge and street construction starts are forecast to end this year up 14%. In 2024, the value of bridge projects is predicted to rise 25%, with street construction not far behind with a 23% increase.