Even as Chicago’s construction costs rose, construction starts in the city remained flat compared to the previous year, according to JLL’s Construction Outlook 2020 report. That’s in contrast to Columbus, where starts were up 39 percent, as well as cities in other regions, such as Boston and Tampa, FL.
JLL expects construction costs nationwide to rise modestly in 2020, between 1% and 3%. However, the report notes that the potential impact of the coronavirus on construction costs due to Chinese factory slowdowns is “a major unknown” at this point.
The coming year is expected to be a stable one for the overall construction industry, but with little growth and key stats like construction volume and employment holding steady.
JLL’s forecast for 2020 is for total nonresidential construction spending to remain level, with
growth under 2 percent. However, the risks and volatility that increased below the surface in 2019 will remain a factor in 2020. The overall demand picture is expected to weaken modestly over the course of the year, which will be a continuation of trends seen over the past few years.
The report identifies the COVID-19 pandemic as a “major unknown for construction costs.”
“A significant outside factor impacting material prices is the developing situation around the COVID-19 coronavirus. The impact of the virus is impossible to predict with certainty, but any prolonged slowdown in Chinese or global economic and manufacturing activity is likely to have significant ramifications for construction costs.”