Short-term Construction Outlook for 5 Sectors

6 October 2021All, ConstructionInfrastructure, Manufacturing, Trends



The outlook for the construction industry in the second half of 2021 is expected to be strong, continuing into 2022. But not all sectors or regions of the U.S. will recover at the same rate. This is the takeaway from the recent Dodge Data & Analytics report “A Mid-Year Outlook for the Construction Industry 2021.”

The report listed expected trends for five construction sectors: residential, commercial, institutional, manufacturing, and infrastructure.

1. Residential

The construction of single-family homes was so strong in 2020 that DD&A anticipates it will slow down for the rest of 2021. It is also being affected by higher lumber prices. Further, the report reminds us that a skilled labor shortage still exists. 


The demand for construction of multifamily structures has dropped in large metropolitan areas as people are tending to move from urban areas to the suburbs and rural regions. DD&A research surmises this may be due, in part, to the newfound ability for many to work from home. Outside large cities, construction demand for apartments, condominiums and townhomes is still healthy.

2. Commercial

Although the need for construction of commercial buildings is expected to rise, the report says demand for certain types of buildings will be stronger than others. Warehouse construction is expected to be the strongest, another result of the increase in online shopping.

Retail construction will be uplifted by the growth of the residential sector in the suburbs, but it is still much slower than historical levels, also affected by the growing popularity of online shopping.

Construction of data centers is needed and follows the trend for increased cloud storage and data transfer demands. This trend is expected to remain strong.  

New office construction will be a mixed bag because of the uncertainty fueled by the work-from-home movement. However, remodeling is seeing a surge in response to post-pandemic worker etiquette, as well as being an alternative to new construction.

Hospitality took a big hit caused by the reaction to the pandemic, and DD&A suggests that it will take a while for demand for hotels and restaurants to increase.

3. Institutional

If it were not for healthcare, the demand for institutional construction would not appear to be very exciting. According to the DD&A report, as well as the eBook “2021 Autodesk Construction Outlook: Risks & Opportunities,” it’s anticipated that new healthcare facilities will be in demand through the rest of 2021, including clinics, nursing homes and, at the pinnacle of that demand, hospitals.

Down a rung or two on the ladder is the call for construction of public schools and institutions of higher learning.  

4. Manufacturing

The manufacturing industry is recovering, and materials shortages indicate that greater factory capacity is needed. But here too, a shortage of skilled workers will hinder the ability of manufacturers to rapidly add capacity and will effectively apply the brakes to that recovery through the rest of 2021.

5. Infrastructure

Electric power generation facilities, especially renewable energy, and environmental public works involving water and sanitation will continue to be in the highest demand in the non-building sector of construction. The DD&A forecast is that construction of bridges and highways and hazardous waste abatement will not gain much traction through the rest of 2021.

Two recurring themes seem to be affecting the recovery: skilled labor shortages (construction and manufacturing) and online technologies (cloud, shopping and working from home). Over the next six months, we will see if the expectations come to fruition and also discover the role supply chain issues and higher materials prices will play in the recovery.

Learn about the onslaught of change and digital transformation causing construction markets to shift … download the free new eBook from Applied Software: “Ultimate Construction Tech Stack for 2021.”



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