Nonresidential construction starts have been lackluster year-to-date, down 12.2% from the comparable period a year ago. However, the Expansion Index paints a more optimistic outlook and a shift in regional activity.

Expansion Index Points Up

The latest US and Canada Expansion Index results point to a 13% US and 18% Canadian expansion in the value of total contemplated projects, respectively. These percentage increases are the total dollar value of construction projects in planning for July 2024 versus July 2023.

This reflects all stages of preparation before construction fieldwork at the beginning of any given month this year compared to what was calculated at the same time last year. The types of structures included in these calculations are multi-family residential, nonresidential buildings, and civil/heavy engineering.

Index Suggests Regional Shift

The Expansion Index data also suggests that contemplated spending has shifted over the last 18 months away from the traditional coastal areas and more towards the center of the country.

Chief Economist Michael Guckes said, “Regional construction activity has been difficult for much of mid-America for the first half of 2024.” But the contemplated spending data in the Expansion Index points to potential changes:

• A year ago, the South and West Census regions of the US were expected to see the greatest increase in activity. Data through the end of July show the Midwest overtaking the West.  
  
  
• In the Midwest a year ago, contemplated construction spending was growing at a 10% pace; that figure has since increased to 32%. 
  
  
• In the West, contemplated spending was 21% a year ago. That same figure has now retreated to 13%. 

The ConstructConnect Expansion Index.

The West is the only region experiencing a decline in contemplated spending in the Expansion Index data. Regional shifts may occur due to many factors, such as political or economic environment, availability of labor, natural resources, or financial incentives.

Projects in the planning phase represent the pipeline of potential future construction work. Tracking changes in the total value of this planning pipeline can signal whether the construction industry is ramping up or slowing down. However, projects in the planning phase may never make it into the construction phase.

Explore the Expansion Index in your area.

About ConstructConnect

Construction Starts Here™ at ConstructConnect, where our mission is to help the construction industry start every project on a solid foundation. A leading provider of software solutions for the preconstruction industry, ConstructConnect empowers commercial construction firms to streamline their workflows and maximize productivity. ConstructConnect operates as a business unit of Roper Technologies (Nasdaq: ROP), a constituent of the Nasdaq 100, S&P 500, and Fortune 1000.