The second half of 2020 and the beginning of 2021 was a phenomenal time for residential construction. As renters sought to shift from renter to owner, the demand for new housing grew exponentially. However, now that the housing market has started to return to normal levels, many construction companies are looking to 2022 to determine their next course of action.
Now that COVID-19 is becoming more manageable, several key industries that construction companies service are seeing phenomenal growth – particularly as consumers seek to return to a life that has some semblance of normalcy. This leads to fantastic opportunities for construction companies that work with the leisure, hospitality, travel, and entertainment industries.
A Governmental Push for Infrastructure Improvements
The corporate section is also set to achieve growth levels that were previously not possible – breaking away from traditional commercial spaces and office spaces. One reason for this is the push for governmental infrastructure improvements designed to stimulate the economy and spearhead construction spending in the upcoming five years.
Non-residential construction is already up 25% when compared to its pre-pandemic highs. This is likely a good indicator of stabilization as more workers migrate back to their offices. With this growth, cities are likely to get much busier, with bars, hotels, restaurants, and much more continue to propel the construction industry’s growth. However, this is not the only factor that should be considered when looking at construction spending.
In addition to new construction opportunities, there is a good chance that the significant backlog of repair work that has been collected and any deferred projects due to uncertainty will resume in the coming months and years. Most experts expect this growth to be further amplified by the promise of governmental infrastructure funding options.
Financing Conditions are not Creating Barriers
One of the most significant barriers to construction growth in the past has been poor financing options. Fortunately, this problem does not seem to be a barrier to growth in 2022, and many banks have relaxed their loan standards to levels unseen in over six years. This has led to an unprecedented demand for financing, suggesting that the craving for construction investment has reemerged.
Financing is also still available for homebuyers looking to take advantage of the dwindling demand for residential housing. Although this segment has started to slow, there are still opportunities, possible with solid competition, for construction companies that are looking to expand in 2022 and beyond. While a challenge, it is one that many construction companies will want to meet head-on.