Construction in North America to fall less than expected in 2020: GlobalData
GlobalData has revised its forecast for North America’s construction industry to -1.7% this year from the previous projection of -6.5% in the Q2 2020 update, as the recovery in the US residential market from the initial shock of the COVID-19 pandemic has been faster than expected.
Dariana Tani, Economist at GlobalData, comments: “The US residential market has been benefiting from an increase in pent-up demand for new homes, record-low interest rates and the noticeable shift in remote working, which have prompted many renters and first-time buyers, who have held on to their jobs and wealth, to look for more affordable and larger living spaces in lower density markets.”
The US construction industry is now expected to fall by -1.1% in 2020 and -0.8% in 2021 compared to the previous forecast of -6.5% and -2% projected earlier this year. However, concerns over the upcoming elections and congress failure to pass another stimulus package remain major near-term risks to the outlook.
Tani continues: “High unemployment rates and the continued rise in new COVID-19 cases across the country is expected to keep undermining business and consumer confidence and keep a large segment of potential buyers on the side-lines.”
Tani adds: “Overall, the short-term construction outlook for North America remains highly uncertain: the coronavirus is still spreading throughout the US while in Canada, infection rates have spiked in recent weeks. This will continue to limit the recovery of the industry and the wider economy as the degree of social distancing (both voluntary and compulsory) will prevail until a vaccine becomes available.”