North America
USA, CANADA & MEXICO – forecast to see between 2.3% & to 3.5% GDP growth in 3rd Q of 2024:
The USA is experiencing increased spending on construction for hi-tech / industrial type capital projects, such as semiconductor / microchip, call centers and EV production & battery facilities. The residential market (apartments, single family homes) is starting to experience a slowdown in activity due to high mortgage rates and a wait and see attitude related to the US General Election that will take place in November.
The 2024 US / Canadian / Mexico Construction market is estimated to be in the $3.05 to $3.15 trillion range – an increase of 2.9% from 2023 (Year to Year), still the largest construction market.
In the USA, construction cost increases have returned to more customary levels since the conclusion of COVID in the range of 2.6% to 3.4%.
In the USA, the year and half US manufacturing construction boom is starting to see some signs of a gradual slowdown, however there still are a good number of EV manufacturing and battery plants together with computer FAB facilities and call centers in the development pipeline that will keep this construction sector reasonably busy for the next 12 to 18 months.
The US construction industry continues to face supply chain challenges, price spikes, longer delivery times for such as components as MCC / switchgear, modules / specialized skids- pre-assemblies, large compressors, heat exchanges, certain key instrument devices, larger pumps, fabricated process piping, specialized pharmaceutical production equipment, HVAC / HEPA / equipment and filters.
Severe shortages of skilled construction labor such as Pipefitters, Welders, Electricians and Instrumentation technicians continue to be a serious problem to the US construction industry.
US construction inflation for materials & labor will continue to remain in the 2.6% to 3.4% range for the next 3 to 6 months until the conclusion of the US General Election in November. High interest / borrowing rates will continue to negatively impact the US Commercial / Housing sector.
US Construction material inflation in the 3 year period from 2021 to 2024 has increased by as much as 24%, with a lot of the increases attributable to COVID and the follow on supply chain issues and material shortages.
In the period 6/2021 to 6/2024, these construction materials have increased by the following percentages.
• Ready Mixed Concrete: 14% to 19%
• Pre-Cast Concrete: 12% to 16%
• Facing Bricks: 11% to 18%
• Copper Pipe / Cable: 16% to 21%
• Roofing / EPCM Products: 14% to 20%
• Timber / Plywood Products: 12% to 15%
• Rebar / Structural Steel: 19% to 28%
• Gypsum Wallboard: 17% to 22%
• HVAC / Plumbing Fixtures: 12% to 18%
• Process Equipment / Piping: 10% to 19%
• Electrical Equipment / Fixtures: 16% to 23%
• Paint / Coatings: 14% to 18%
USA Real GDP growth forecasts for 2024 is in the 2.8% to 3.3% range, not too bad considering all of the events and challenges the US economy has faced.
Canada’s construction market is projected to grow to C$255 billion by the end of 2024 and increase to C$263 in 2025. Canada’s construction activity in the 3rd Q of 2024 is forecast to expand marginally by 1.6% to 2.6% over 2023 levels. Construction material costs are set to increase by 2.6% to 3.2% and construction labor will see an increase of 2.6% in 2024 from 2023 levels.
Ontario, British Colombia and Quebec appear to the busiest Canadian Provinces for construction, with a mixture of Commercial, Infrastructure, Industrial and Residential construction activity. The Canadian unemployment rate is currently at 6.2%, with construction a little higher at 6.9% to 7.3%.
The Mexican construction sector is forecast to grow in 2024 and 2025 due a number of Government sponsored infrastructure projects and a pipeline of commercial and industrial projects. Mexico’s GDP will be in the 2.3% to 2.7% range going into 2024 3rd Q. Construction related inflation is currently 4.8% to 5.2% and construction unemployment is 2.8% to 3.2%, which is a significant improvement from 12 months back.
