Market & Trends: ELECTIONS AND CONSTRUCTION
Construction Trends During Election Years HISTORICAL ELECTION YEAR PATTERNS CAN INFORM DEVELOPERS’ AND INVESTORS’ STRATEGIES.
TAYLOR MILLER
P redicting the economic behavior of any industry is typically a tall task. However, forecasting the construction industry’s economic fluctuations during an election year is a much less daunting undertaking. With plenty of data to analyze, certain patterns are obvious in the months approaching an election and the months after a President is voted into office. ELECTION INFLUENCE ON CONSTRUCTION DYNAMICS The construction industry is particularly tethered to the political climate due to several factors such as tax policy, interest rates, regulation changes, and
policies surrounding immigration and labor laws. Historical trends reveal that election cycles often bring a mix of uncertainty and optimism, affecting investments, project timelines, and economic forecasts within the construction sector. Understanding these trends can help developers effectively navigate the challenges in the construction landscape and
in construction spending. Developers and investors tend to adopt a wait- and-see approach, postponing major investments until after the election. This trend is driven by the desire to avoid committing resources in an uncertain political environment. For example, in 2012, total construction spending in the United States exhibited a significant dip from August to October, according to data from the U.S. Census Bureau. The same data set shows a similar trend in both the 2016 and the 2020 elections. However, all 2020 data must be taken with a grain of salt due to the slowdown ushered in by the COVID-19 pandemic.
capitalize on the opportunities presented by election cycles.
PREELECTION CAUTION: ANALYZING THE SLOWDOWN In the months leading up to an election, it is common to observe a slowdown
20 | think realty magazine :: september - october 2024
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