Construction industry adding more to the economy

The construction industry continues to add to the U.S. economy, while things are holding steady in the commonwealth, according to a recent report from the Associated Builders and Contractors.

An ABC economist said private construction added to its percentage of gross domestic product in 30 states and nationally last year. In the U.S., that number increased to 3.9 percent from 3.8 percent in 2014.

In Pennsylvania, which remains in the middle of the pack among states, construction was responsible for 3.8 percent of GDP in Pennsylvania last year. That was flat from 2014.

The new report found that investments in lodging, office, manufacturing and multifamily construction have led the way nationally. An improving jobs market, rising income levels and low energy prices have all fueled the economic recovery.

Construction accounted for the highest percentage of state GDP in North Dakota at 7.6 percent, according to ABC. On the low end was Connecticut and New York at 3.1 percent.

Six states saw construction's contribution to GDP decline from 2014.

Housing notes

ABC expects continued growth in the multifamily sector, according to the report.

Relatively tight mortgage lending standards for potential homebuyers is impacting the single-family market. ABC also cited struggles for smaller builders, including difficulty obtaining financing, a lack of developed lots to build homes on and insufficient skilled labor.

Still, single-family construction is likely to increase this year and accelerate into 2017, ABC said, but activity will remain below long-term needs in the U.S.

Meanwhile, the rental market will continue to grow, but there is concern that too many high-end apartment projects in major cities are moving forward at the expense of more affordable units. However, older apartment complexes often become more affordable with an influx of new construction.

Source: Central Penn Business Journal