Nov 6, 2019
During the first three quarters of 2019, the amount spent on construction in the United States was on par with the level one year earlier. However, a seismic shift is happening when it comes to determining the type of construction projects that get the green light to go ahead.
All indicators point to an upcoming boom in the category of megaprojects and major capital (projects costing $1 billion or more). The rise of these megaprojects and MCPs can be seen in large infrastructure-related airport construction projects, projects aiming to improve the rapid transit of cities, the construction of high-speed rail, and a thriving energy sector which seeks to improve the designs of gas plants, oil and gas refineries, and existing liquified natural gas (LNG) projects. The United States has become a leader in the energy sector and construction is ramping up for energy-related major capital projects. Experts in the construction industry chalk this trend to the decreased importation of oil from other countries as liquefied natural gas and oil drilling is increasingly done within U.S. borders. The United States is now an exporter in LNG and megaprojects are booming. The global demand for natural gas hasn't slowed down and the U.S. is one of the few countries that can ramp up enough projection to meet worldwide demand. However, it's not just LNG megaprojects that are leading the growth in MCP construction. Plants are being built to keep up demand for refining plastics and chemicals. Additionally, rapid transportation projects are a driving force for cities across the country as they reinvest in crumbling infrastructure. Industry experts see a huge opportunity in building American megaprojects in the airport construction sector. For instance, there are plans for a $13 billion redevelopment of the John F. Kennedy International Airport in New York City.
For the first eight months of 2019, the dollar value of U.S. construction starts was almost level with that of 2018, but, according to Alex Carrick, chief economist for ConstructConnect, there has been a shift in the type of projects that are moving forward.
Energy-related developments of $1 billion or more with a major engineering component have dominated U.S. starts, while starts for mid-size and smaller projects are down 15% so far this year.