Growth in Institutional Construction Detected for the First Time in 6 Years

For the first time since 2008, the institutional construction sector is showing signs of growth. Institutional construction increased a modest 4 percent in 2014, in contrast to several years of either stagnation or declines, beginning in 2009.

institutional construction The uptick in the institutional sector was reported in the 2015 Dodge Construction Outlook, produced by Dodge Data & Analytics.

Growth in this sector is expected to continue into 2015, with a 9 percent increase expected in construction starts for institutional projects, including educational facilities.

The institutional construction sector includes schools, universities, healthcare centers, and other facilities that serve the public.

The previous lowered performance of this area of construction was caused by dependence on public funding for projects. During the eight-year period since 2008, such funding had been limited.

The Dodge Construction Outlook report indicates that increases are occurring in the construction of K-12 schools, fueled by the recent passage of several school construction bond measures.

Construction on university campuses is also set to increase as returns on investment by college endowments improve.

Healthcare facility construction has been stalled over the past few years due to volatility in the industry caused by healthcare reform. However, as the population ages and needs more long-term care, and as existing healthcare facilities deteriorate and require replacement, growth in healthcare construction is expected to increase.

For example, the Dodge report noted an anticipated healthcare construction growth rate of 6 percent in 2015.

The report also foresees considerable growth in entertainment and recreational facilities, possibly reaching a high of 10 percent.

Construction industry managers, contractors and business owners can rely on Construction Monitor for the most recent and accurate information on industry developments and trends, including institutional construction.

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