On the heels of an 8 percent gain last year, U.S. new construction starts are forecast to rise by 6 percent this year to $506 billion, according to a recent report from McGraw Hill Construction, a division of New York-based McGraw Hill Financial.
With a tight inventory, single-family housing could grow by 24 percent in the number of dwelling units. Multifamily is expected to climb by 20 percent in units, according to McGraw Hill.
Meanwhile, commercial building is forecast to grow 15 percent after growing by 11 percent in 2012. Office construction will remain relatively subdued with fewer government office buildings in the pipeline, according to McGraw Hill.
Institutional building is slated to fall by 5 percent, due to tighter local and state budgets, which impacts school construction. The implementation of the Affordable Care Act is restraining construction of health care facilities, according to McGraw Hill.
Finally, manufacturing is expected to drop by 8 percent in a sluggish U.S. economy, public works should grow by 3 percent because of growth for highways and bridges, and electric utilities will see a 40 percent plunge in value of construction starts. The latter is due to new facilities coming online and capacity utilization rates dropping, which is putting downward pressure on construction.