The study, “Navigating Volatility in the U.S. Residential New Construction Sector,” co-authored by Wells Fargo Securities and management consulting firm L.E.K., analyzed the market's future with a two-pronged approach and overall optimism: near-term risks emanating from a possible recession, and the industry's anticipated mid-term trends over the next several years. If a recession hits soon, residential construction would have a "quick, shallow decline," a "rare positive offshoot from its weak revival," Fortune reports.
A revival in home and apartment construction would be a tonic for the U.S. economy. Housing accounts for nearly one-fifth of national income, and a big chunk of that number is residential construction. That crucial category has lagged the post-financial crisis expansion, and now sits at its level in 2003, according to the Department of Commerce. The resurgence the new report predicts could add as much as an extra 0.2 percent to GDP over the next several years, versus the scenario if housing remains on its current, slogging course.