US market intelligence: a change in pace
Our Q2 2024 US market intelligence report provides market and regional analysis for the region, as well as economic insights and advisory from our team of experts.
Economic and construction market overview
The US economy and construction sector continue to grow, underpinned by resilient demand conditions.
Interest rates, however, remain high, due to the stubbornness of general inflation. This is impacting the pace of economic and construction growth, which has shifted down a gear.
Sub-sector stalwarts, such as industrial and manufacturing and infrastructure workloads remain bright but are easing off. Residential and commercial real estate's outlook has improved, yet continues to be faced with several headwinds.
How market conditions are shaping escalation forecasts
Lagged Bureau of Economic Analysis data confirmed that real US construction GDP ended 2023 on a high, growing by 7.5 percent year-on-year in Q4 2023.
Construction spending data however, including escalation data on outcomes, show that the opening three months of 2023 were less bullish, and the value of construction moved to an increase of 0.3 percent on the quarter.
The residential sector, which is more exposed to interest rates and capital investment flows, fell by 0.3 percent over the same duration in Q1 2024.
Material costs are maintained
In Q1 2024 US construction materials and component costs increased by 1.1 and 1.4 percent on the quarter and years, respectively. This leaves materials costs just 3.6 percent below the peak seen in Q2 2022 and 37.2 percent up from pre COVID-19 values.
The recent upwards shift has been driven by growth in concrete products, insulation materials and external works, some of which continue to be impacted by high infrastructure workloads. While materials growth rates are much reduced when compared to the rapid increases seen in the two years after the pandemic, costs are still high.
