Commercial contractors could be slightly busier in 2015 than they were last year.

After the sector ended 2014 on a high note, with 7% more total construction put in place than the year before, two influential industry forecasters have predicted a healthy increase in groundbreakings on commercial job sites this year.

Total gains by the end of 2015 could add up to 15%, compared with an estimated 14% increase in 2014, thanks, in large part to office construction. Likewise, institutional building could pick up by 9% as more jurisdictions continue to invest in K-12 school construction.

Both of those estimates came from the 2015 Dodge Construction Outlook, a construction industry forecasting and business planning report, which predicted a 9% increase in total U.S. construction starts for 2015, outpacing 2014’s 5% increase. That number includes a forecast for an 11% gain in single-family housing units and a 7% gain in multihousing starts.

Broad-based improvement

Other predictions from Dodge Data & Analytics, which noted that the optimistic outlook for commercial construction is based on the likelihood that more nonresidential sectors than usual will show improvement during the coming year:

• Expect “healthy construction activity” in fields related to technology, finance, hotels, and warehousing.
• Retail construction could be “more tenuous” this year.
• After an unexpected 2014 slump in the construction of healthcare facilities, look for activity in that sector to rebound.
• Likewise, public works construction should pick up to the tune of 5% after a 9% decline last year. Work in that field will be bolstered by highway and bridge construction and environmental projects.
• Federal construction spending will continue to be restrained, while states will find funds for their jobs by raising user fees and relying more heavily on public-private partnerships.
• Building of electric utility facilities will continue the downward slide that began in 2013 after an especially busy 2011 and 2012. Because several new plants are scheduled to begin operations this year, fewer new plants will be needed.
• Fewer factories will be built in 2015; in fact, the Dodge report estimates a "sett[ling] back” of 16% in that sector after an impressive showing both in 2013 and 2014. Still, next year’s activity will remain above average.

Contractors are optimistic

Almost half of the country’s construction professionals told Construction Equipment magazine that they expect their volume of contracts this year to exceed last year’s.

Yet the magazine’s Annual Report & Forecast calls that confidence “still cautious” as the economy recovers slower than the builders had hoped.

The contractors said they anticipate that remodeling work and nonresidential building will improve from “average” last year to “good” in 2015. And despite an expectation of fewer federally funded water and transportation projects this year, construction industry experts have said they expect the new year to be “good for business.”

The annual outlook also noted:

• The pros expect business to be good in eight of nine regions across the country; the Mid-South region could lag. The outlook is brightest, they said, in the South Atlantic, Southern Plains, and Mountain States regions.
• 63% of the pros in the survey said they expect nonresidential contract work to pick up, while 6% predicted a decrease in the volume of jobs.
• Competition for jobs will become more intense over the next year. 75% of nonresidential contractors called the rivalry over jobs “intense” or “very competitive,” compared with 57% of residential builders.
• 68% of the contractors said they hope to raise their bid prices; just 4% said they expect prices to decline. Higher bids, they said, will reflect the rising cost of construction materials.