GlobalData has revised its forecast for North America’s construction industry to -1.7% this year from the previous projection of -6.5% in the Q2 2020 update, as the recovery in the US residential market from the initial shock of the COVID-19 pandemic has been faster than expected.
The US construction industry is now expected to fall by -1.1% in 2020 and -0.8% in 2021 compared to the previous forecast of -6.5% and -2% projected earlier this year. However, concerns over the upcoming elections and congress failure to pass another stimulus package remain major near-term risks to the outlook.
In Canada, GlobalData now expects construction output to contract by 5.4%, up from the -7% expected in the previous forecast update. Canada’s construction activity has been recovering since May as many provinces across the country started to ease restrictions in the sector; however, in July, the level of activity was still slightly lower than in February, before the COVID-19 pandemic emerged while building permits and employment levels continued to rise albeit at slower rates.
Dariana Tani, Economist at GlobalData, comments:: “Overall, the short-term construction outlook for North America remains highly uncertain: the coronavirus is still spreading throughout the US while in Canada, infection rates have spiked in recent weeks. This will continue to limit the recovery of the industry and the wider economy as the degree of social distancing (both voluntary and compulsory) will prevail until a vaccine becomes available.”