After a year of solid gains in home construction, economists believe we’ll see more of the same in the year ahead, reflecting a strong job market nationally with unemployment at the lowest point in nine years.
Construction spending – which includes nonresidential and government activity – rose 0.9 percent in November after a 0.6 percent increase in October, according to the latest Commerce Department report.
Construction overall came to $1.18 trillion in economic activity, the highest point since April 2006 when a housing boom fueled building.
So, why are economists optimistic about the next 12 months?
In part, it’s because of President-elect Donald J. Trump’s vows to increase spending on projects to repair and replace the country’s aging infrastructure.
Democrats in Congress have expressed support for Trump’s proposals to boost construction spending. His ideas, however, may still face opposition from Republicans worried about high deficits.
Colorado is among the states that should see decent growth.
Last month, the University of Colorado Boulder released its economic outlook for 2017, predicting Colorado’s economy will rev up slightly in the next year, led by hiring in construction, tourism and health care.
The forecast calls for Colorado to gain 63,400 jobs this year, which represents a 2.4 percent rate of growth. That’s ahead of the 2.2 percent rate estimated for 2016, but below the 3 percent-plus rates seen in recent years coming out of the recession.
Still, Colorado should rank among the top 10 states for job growth for the sixth year in a row, making it a draw to workers in search of opportunities.
In Kansas, both the service and trade, transportation and utilities are expected to lead growth in the state. The service sectors are anticipated to be the fastest growing segment of the Kansas economy in 2017, adding over 11,000 jobs for 1.8 percent.
There was also good news in a recent survey of purchasing managers at companies in nine states that include Missouri and Kansas.
An economic index produced from the survey climbed sharply to 53.1 in December compared with 46.5 in November. An index score above 50 indicates expansion in manufacturing activity. Below 50 suggests a contraction.
“This is the second straight increase in the overall index and points to an improving regional manufacturing economy. I expect this to generate even healthier growth for both manufacturing and non-manufacturing for the first half of 2017,” said Ernie Goss, the Creighton University economist who oversees the surveys.
Good news, indeed. Happy New Year, everyone!