Philadelphia’s outlook has turned to growth this quarter, as volume is forecasted to peak by 2019.

With 29 high-rise towers currently under construction, the market is definitely busy. The pace of volume growth is forecasted to $17.2B (normalized 2009$) and recede slightly in 2020 (-1.4%). Growth is slowing and permit activity is bearing this out. While more building permits were issued in 2017 than in 2016, there was still a major slowdown in the pace of new permits. Permit activity saw an 8.6% increase 2017, much slower than the 25% growth rate between 2015 and 2016. In addition, a majority of the permits issued in 2017 were for “light residential” projects. After a 4.9% volume increase in 2017, this year’s construction volume growth is forecasted to increase 1.4% and plateau in 2019 with a 0.7% volume increase. Only three sectors are forecasted to grow the next two years: education (+4.7% annually), healthcare (+1.3%), and manufacturing (+1.0%). Labor availability appears to be adequate for the time being as 90% of the contractors surveyed statewide by the AGC in September rated the pipeline for supplying well-trained craft personnel fair or better. The construction labor force has actually dropped to 120,100 workers, a decline of 700 laborers since July 2017.

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