After a disappointing third quarter, the construction industry regained momentum in October, with signs pointing to continued growth in the months ahead. Indicators were up across the board, including employment figures, with most areas of the industry reporting notable year-over-year increases.

Early forecasts are that 2015 will look even better.

Leading into the fourth quarter, new construction starts climbed to a seasonally-adjusted 10 percent in September on the Dodge Index, reaching their highest point so far this year. Total new starts for the first nine months of 2014 are up 5 percent over the same period last year.

Giving the index a substantial boost were the institutional group (up 32 percent) and education (up 34 percent). Starts of several large-scale projects produced spikes in transportation terminal work (up 171 percent), manufacturing plants (up 105 percent), electric power plants (up 107 percent) and public works projects (up 83 percent), continuing the volatile month-to-month trend seen throughout the year.

September was not a good month for commercial projects, but activity improved in October. The Dodge Momentum Index for October reported a 6.8 percent increase in commercial projects over September, as well as an 8.8 percent increase in institutional building.

After three months of declines, the DMI overall was up 7.6 percent from September and 18 percent for the same period last year. In releasing the figures, the Dodge analysts noted that "overall healthy economic growth is working its way through to the construction sector."

Although forecasters had expected residential construction to rebound after the unusually long winter, performance has been mixed in both the single-family and multifamily categories, with some areas of the country faring better than others.

The National Association of Home Builders/First American Leading Markets Index for the third quarter of 2014 shows some signs of gradual improvement. The national index reading ticked up just a notch, from .89 in the second quarter to .90 in the third quarter (indicating the national average is running at about 90 percent of "normal" activity). However, nearly half the markets tracked were up since August, providing some optimism that the market will continue its recovery in 2015, even though at a slower pace than previously anticipated.

On a more positive note, the NAHB’s 55+ Housing Council states that "demand for 55-plus housing has never been higher." NAHB's 55+ Housing Market Index jumped nine points in the third quarter to 59, its highest level since its inception in 2008. The index has reported year-over-year improvements for the past 12 consecutive quarters. Gains occurred in both the single-family and multifamily condominium categories.

All this renewed activity has been good for construction jobs. The U.S. Bureau of Labor Statics reported that U.S. construction added 12,000 jobs in October, and unemployment in the industry declined from 7 percent to 6.4 percent — its lowest level since November 2007. September's estimate was revised upward from 16,000 to 19,000 net new jobs.

The nonresidential sector lost 1,900 jobs in October; however, the sector is up 18,200 jobs from October 2013. A recent article in The Washington Post cites several sources predicting construction jobs will continue to grow next year, and the industry could possibly add as many as 1.6 million jobs between 2012 and 2022.

Coming on the heels of these positive reports, Dodge Data & Analytics (formerly, McGraw-Hill Construction) released its 2015 Dodge Construction Outlook report last week, which predicts a 9 percent rise in new construction starts next year. The report foresees a more balanced and broad-based growth, with more sectors contributing to the overall health of the industry.

If the economy continues to improve, some categories — such as commercial and residential — could see double-digit increases in the year ahead.