Outlook projects growth for aggregate in 2021, 2022

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Expect to see a lot of these signs in 2021. The economy is growing rapidly, and it will grow fast enough that labor shortages will show up in select industries – including construction. As of now, it looks like the pandemic is almost over for the U.S. While there is no doubt COVID-19 will be around from now on, its impact will hopefully be similar to the flu season: uncomfortable, but not debilitating.

Going on that theme, along with a huge stimulus bill ($1.9 trillion), means a booming 2021 and a solid 2022. By fall, our problems will be supply chain bottlenecks, skilled labor shortages and home affordability.

Regional observations

Regionally, the increased movement to lower density areas will continue, even as business offices open.

New management practices for remote workers are still in flux but are becoming accepted as a normal part of operations. New hybrid models of work from home part-time and office part-time are now common for anyone who can work using a laptop. Smaller communities are gaining in their cost-benefit ratio with large metro areas. Improved internet (i.e., Starlink), lower-cost electricity, lower crime and lower home prices per square foot mean non-urban areas will far outpace urban areas over the next decade.

This means a shift in the percentage of construction for nonresidential. It will move lower, and residential and nonbuilding will move up in segment percentage. Think home office versus high-rise office buildings. Because of these changes, we increased our volumes for 2020 to 2022. Growth will be concentrated in the Sun Belt, Mountain West and suburban areas near cities. Agg pricing strength will return by midyear in most areas.

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David Chereb, Ph.D., is with David Chereb Group (DCG), which produces customized market forecasts by major segments of construction, from the county level up. Clients use DCG market intelligence reports for business planning and acquisition analyses in aggregate, ready-mixed concrete and cement. Visit davidcherebgroup.com for more information.

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