ECONOMIC OUTLOOK
Back to growth
level in 2008 following a deep recession. There
is a need to renovate existing facilities and rooms
and even expansion in some markets. Spending
will remain strong through 2014, as conditions
continue to improve.
Retail had a decent 2012, but will struggle for
even +1% gains in 2013. This sector continues
to operate with excess capacity, and consumer
confidence
remains
subdued.
Housing,
particularly home price increases, will be help
this segment thanks to the boost it will give to
consumer confidence. Given rising home prices,
healthy growth in retail construction should be
seen in 2014 and beyond.
Construction in the manufacturing sector
contracted early this year after a very strong
2012. Given the slow pace of global recovery,
2013 will be subdued. However, the prospect
of readily available domestic feedstocks from
the development of North American shale and
tight oil resources will lead to a resurgence
of manufacturing construction activity by
2015, with a prolonged upturn as downstream
manufacturing develops.
The weak link in the US construction forecast
remains public spending. From health care to
education to streets and highways, fiscal restraint
is dictating postponement of investment.
Water infrastructure
The only segment with appreciable growth in
2013 has been water related infrastructure, a
reflection of the housing recovery, and possibly
expansion of water treatment activity in the shale
gas fields.
Housing will lead to improved growth in street
construction in 2014 and beyond, but the broad
infrastructure sector will not see meaningful
growth until 2015, and even then it will be in
the low single digits.
The US construction market is gaining
momentum, but the pace of growth mirrors that
of the broad economic recovery – slower than past
economic upturns. However, the preponderance
of evidence suggests that the recovery is real and
sustainable, with improving prospects each year
through 2015 and likely into 2016.
iC
international
construction
september 2013
18
IHS Global Insight
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Components of non-residential construction
400
300
200
100
0
Billion 2005 dollars
2006 2007 2008 2009 2010 2011 2012 2013 2014
2016
2015
Infrastructure
Structures
Housing will lead to improved
growth in street construction
in 2014 and beyond, but the
broad infrastructure sector
will not see meaningful
growth until 2015.
