It’s no secret to anyone that single-family residential construction was one of the hardest hit sectors in the United States during the “Great Recession” and the subsequent recovery period. The collapse of the U.S. market created aftershocks that still resonate and the conditions continue to be extremely challenging. And while recovery in single-family construction is still a work in progress, there is a related bright spot for contractors: multifamily construction.
The research firm IBISWorld released a report in March that highlights positive growth and opportunity for contractors focused on multifamily construction. According to the report, industry revenue is expected to jump in 2012 by 18.4 percent to $27.6 billion. Several trends have emerged in the post-recession United States: continued migration to metropolitan areas; continued decline in home ownership rates and improvements in economic conditions. Correspondingly, multifamily vacancy rates during the next five years are also expected to continue to fall. These trends all support what IBISWorld believes will be a growth trend over the next five years of 9.3 percent to $42.9 billion in 2017. Within multifamily construction, IBISWorld predicts that planned communities, luxury high-rises and lifestyles centers will all be drivers for growth among complexes or developments containing five or more units.
All this supports what people in the industry already know — while it’s tough out there, opportunities do exist. The IBISWorld data is reassuring because it points to continued improvement and more light at the end of the tunnel. All this supports what people in the industry already know — while it’s tough out there, opportunities do exist. The IBISWorld data is reassuring because it points to continued improvement and more light at the end of the tunnel.
What are you seeing in your business? Is multifamily construction increasing?
– Kyle McGovern