Housing Market Driving Current Growth, PCA Economist Says

Sept. 22, 2014

 The housing market will be the strongest catalyst for economic growth in 2014 and 2015, Dave Zwicke, market intelligence director and senior regional economist for the Portland Cement Association told a group of executives at the AED/Infor Executive Forum last week in Chicago. Zwicke predicted strong growth in housing starts through 2018, growing from about 4.2 million homes under construction in 2013 to 7.4 million in 2018.

Zwicke said pent-up demand is strongest in the Southeast and Southwest U.S., leading the housing recovery over the next few years. While current trends are favoring multi-family dwellings, single-family units will begin to regain their strength in 2016 through 2018, Zwicke said.

Zwicke also predicted steady growth in nonresidential construction spending, with a 5.9-percent increase this year expanding to an 8.7-percent growth rate in 2015, 9.2 percent in 2016, 6.9 percent in 2017 and 5.6 percent in 2018. Zwicke predicted total construction spending would rise 4.1 percent in 2014, 9.2 percent in 2015, 9.8 percent in 2016, 7.5 percent in 2018 and 5 percent in 2018.

The private sector is currently driving the recovery, Zwicke said, with residential spending accounting for 45 percent of construction spending in 2014, followed by 25 percent in commercial, and “other” accounting for 30 percent, with utilities, energy, agriculture and mining comprising the “other” category, with particularly noticeable strength in energy markets.

 Zwicke predicted the public sector would regain strength in 2015.