There are lots of questions swirling around about the future economy, particularly in Boston. What will be coming in 2020? If you’re a developer or involved in construction, here are a few things you’ll need to know and how predictions could affect our booming beantown.
Business Owners have a Bleak Outlook
Recent surveys in Massachusetts show that business owners are hunkering down for the coming year. In October 2019, Associated Industries of Massachusetts reported that a full two-thirds of survey respondents not only expected an economic slowdown for 2020, but a contraction. Already, Massachusetts is seeing the effects of this, with employers hesitant to hire, fewer purchases being made, and extra inventory liquidated.
But the Construction Market Shows Otherwise
Business owners bracing for impact—that’s one side of the picture. On the other end of things, in Boston, it looks as through the construction sector will continue to grow in 2020. Data from Cumming Insights shows where construction is expected to remain steady, and where it will keep growing.
According to their predictions, the housing market will stay steady, showing no growth for the year. However, the tech industry within Boston is booming. With the rising demand for tech, construction growth will shift to this sector. In fact, tech growth is expected to be a major driving force behind Boston’s economy during 2020. This is because there are lots of things supporting this growth—proximity to Harvard and the Massachusetts Institute of Technology, for instance, plus plenty of start-ups providing jobs for new residents flocking to the city. There are also several major tech corporations expanding within Massachusetts, including Verizon, Apple and Google.
Things like hospitality and gaming are growing, with new hotels and casinos opening. With the population rising and unemployment low throughout the city, it’s expected that sectors including healthcare, education and manufacturing could grow to meet the city’s demands.
Boston’s Industry is Recession-Proof, But the Housing Market?
Economists believe that by 2022, the United States will have entered another recession. Boston itself is expected to stay strong throughout largely because of major industries that just keep growing. Often during a recession, the housing market enters a downturn along with the rest of the economy, with home prices falling. But experts believe that Boston may be different in this regard. Because of the industry keeping new residents flocking to the city, and because of the scarcity in available homes within Boston, prices are expected to remain high.
And what about new residential construction? Contractors will continue to build new homes and condos, of course, but there may not be much growth, if any, in this part of the construction sector. That’s in large part because homebuyers will feel the hit to their wallets. Inflation will go up, raising the cost of living, while housing prices remain high, which reduces the average individual’s buying power.
Other Construction Trends to Look for in Boston
It’s a safe bet that construction will grow across health, education and tech industries. But what about other construction markets?
Public transit may be a big industry to look at in 2020. This is because with housing prices remaining high, residents are flocking away from the more expensive districts nearer to their workplaces. The result is longer commutes, congested traffic, and a strain on public transit systems. Construction may grow in this area simply to help alleviate these issues.
Zoning changes, if approved by local lawmakers, could also drastically shift the construction picture in Boston. Right now, lots of Boston areas are zoned against multi-family development projects. However, lawmakers are already starting to shift. For example, in Somerville and Cambridge, there are proposals being considered that would allow for affordable housing in the areas.
Flexible co-working spaces may be another trend for developers to look out for. The growing number of startups means that these new businesses need flexible spaces to expand. Currently, there are more than 3.7 million square feet of co-working spaces within Boston, and that’s a number that could grow as this trend continues.
Overall, while some reports paint a bleak picture of business contraction and a looming recession, Boston is a resilient city with strong industries that will continue to hold steady no matter what the economy does. What does this mean for developers and contractors? It means that there will always be work—but the focus may shift away from things like housing or retail and more toward tech and office space.
Our building materials business is located in the heart of Boston and continues to assist developers and contractors in building Boston whether the project is residential, commercial or mixed use.