Nonresidential construction starts are paving the way forward in the construction industry. Although residential construction has been flat, infrastructure and commercial building are giving builders reason for optimism amidst the buzz about the softening economy. Here’s what builders need to know about where the action is now.
Manufacturing and Infrastructure Builds
Construction Dive reports that overall, “Total construction starts closed 2022 on a winning streak, rebounding in December from the previous month to post a 27% gain for a seasonally adjusted annual rate of $1.185 trillion. That’s the first monthly year-end jump since 2017, according to Dodge Construction Network.” Given the high mortgage rates, it’s not surprising that residential building starts were down 3% in 2022, as:
Nonbuilding construction, which includes infrastructure projects such as roads and bridges as well as utilities and pipelines, was…up 30%, at $281.4 billion….For all of 2022, total construction starts were 15% higher than a year earlier. Nonresidential buildings — think commercial properties and plants — gained 38% year over year, while the nonbuilding sector posted a 19% rise.
“December starts revealed where the current strength in construction lies: manufacturing and infrastructure,” said Richard Branch, chief economist at Dodge.… “It is those segments that will provide insulation for the sector as the economy softens in 2023.” Branch said that he expects higher interest rates to weigh on the economy and restrain construction starts in 2023, but “it’s encouraging to know that the new year is starting with a great deal of positive momentum.”
Another positive sign for builders is that materials prices have had the largest drop since the onset of the pandemic in spring 2020,“signaling that meaningful relief from inflation may finally be materializing in the sector, even as recession fears remain.” For builders eyeing new projects, financial insights, a surety line of credit in writing and the ability to bid quickly bid can be game changing. Qualify for The Partnership Account for Contractors® from Colonial Surety and you will have all this—and more. Specifically, The Partnership Account® provides a private digital dashboard, complete with a day to day snapshot of single and aggregate limits, as well as current and available bond capacity. As work in progress decreases, work on hand can be updated—increasing your aggregate so you can go ahead and move that next bid ahead. Take control of your finances—and get a jump on the competition as you issue your own bid bonds, instantly, using our powers of attorney. Get started today:
Pre-Qualify and Get Free Scores Here.
Nice To Know: Up, Up, Up
Activity is up for utility and gas plants, highways and bridges and environmental public works projects. Among the large projects that have recently gotten underway are:
- The $2.2 billion Champlain Hudson Power Express transmission line across several counties in New York.
- The $1.2 billion New Fortress Energy LNG terminal in Grande Isle, Louisiana.
- The $535 million Black Diamond solar project in Morgan and Sangamon
- The $8.5 billion Golden Triangle Ethylene Cracker in Orange, Texas.
- The $2 billion AltAir/World Energy renewable fuels facility in Paramount, California.
- The $1.4 billion Stellantis electric vehicle plant in Kokomo, Indiana.
If you’ve been holding back on your next project, you might find this reminder from Pros helpful: although, trying something new “won’t guarantee success, nothing truly will, but there is one guarantee you can count on in your business. If you don’t take any risk at all, you severely limit the possible future of your business.”
Ready to get growing? The Partnership Account® helps contractors take strategic risks, as they stack up wins, one in front of the next. In addition to a surety line of credit—in writing, The Partnership Account® gives qualified construction companies:
- Control of bidding and bonding, online and in real time.
- Powers of attorney to seal and issue their own bid bonds—in minutes.
- Fast, direct, confidential bid bonds—no middleman.
- Direct access to performance and payment bonds on a customized dashboard.
- Real time tracking of bids and work on hand.
- Immediate access to Colonial’s lead underwriter as new opportunities emerge.
- A private Owner’s Dashboard to view surety lines, adjust work and analyze bids.
Learn more and pre-qualify for a Partnership Account® now!
Founded in 1930, Colonial Surety Company is a leading direct seller and writer of surety bonds and insurance products across the USA. Colonial is rated “A Excellent” by A.M. Best Company and U.S. Treasury listed.