Associated Builders and Contractors (ABC) forecasts a steady and ongoing economic recovery for the U.S. commercial and industrial construction industries in 2015. The reasonably brisk industry recovery in 2014 should continue in 2015, with momentum especially growing in segments closely related to the current American energy and industrial production resurgence.
"ABC forecasts nonresidential construction spending will expand by roughly 7.5% next year," said ABC Chief Economist Anirban Basu. "The segments that will experience the largest growth in construction spending in 2015 include power (e.g. natural gas-related construction), lodging (leisure and business spending), office space (professional services employment creation) and manufacturing (rebounding industrial production).
"The public sector will see far more sluggish growth in construction spending," Basu warned. "However, this fits a multi-year pattern with private nonresidential spending exceeding public nonresidential spending by 28% in 2014, up from 15.6 percent in 2013.
"There are always issues, of course, including compensation costs that will rise more quickly per worker next year than in years past," Basu cautioned. "This will be particularly apparent in areas like Louisiana and Northern California, places that have experienced significant economic growth recently. Additionally, while material price inflation has been suppressed, it may accelerate in 2015. Last year, prices were suppressed due to a combination of factors, such as softer growth in most of Europe and Asia, rising energy production here in the U.S., and a stronger dollar. Some of these factors might not be as prominent next year, so the stage could be set for price increases close to 3 percent.
"Taking into account current economic momentum, especially in the form of employment growth, ongoing accommodative monetary policy and increased growth in consumer spending, further stoked by falling gasoline prices, 2015 should be a decent one for the U.S. economy," said Basu. "Contractors should continue to experience a lengthening backlog and the industry should continue to see increases in nonresidential construction spending and employment growth."
Related Stories
Architects | Mar 2, 2020
Two ‘firsts’ for Sasaki and LEO A DALY
Following an industry trend, the firms hire chiefs of technology and sustainability, respectively.
Architects | Feb 26, 2020
Seven architects aim to design the “newsstand of the future”
The winning project will be created and presented during Milan Design Week 2020.
Architects | Feb 24, 2020
Design for educational equity
Can architecture not only shape lives, but contribute to a more equitable and just society for marginalized people?
AEC Tech | Feb 22, 2020
Investor interest in the built environment not quite as avid in 2019
Builtworlds’ annual list of venture deals led by workspace providers.
Modular Building | Feb 16, 2020
On the West Coast, prefab gains ground for speedier construction
Gensler has been working with component supplier Clark Pacific on several projects.
AEC Tech | Feb 13, 2020
Exclusive research: Download the final report for BD+C's Giants 300 Technology and Innovation Study
This survey of 130 of the nation's largest architecture, engineering, and construction firms tracks the state of AEC technology adoption and innovation initiatives at the AEC Giants.
Office Buildings | Feb 11, 2020
Forget Class A: The opportunity is with Class B and C office properties
There’s money to be made in rehabbing Class B and Class C office buildings, according to a new ULI report.
Architects | Feb 6, 2020
NBBJ acquires immersive technology design studio ESI Design
NBBJ has acquired experience design studio ESI Design. The acquisition signals a new era where buildings will be transformed into immersive and interactive digital experiences that engage and delight.
Sponsored | HVAC | Feb 3, 2020
Reliable Building Systems Increase Net Operating Income by Retaining Tenants
Tenants increasingly expect a well-crafted property that feels unique, authentic, and comfortable—with technologically advanced systems and spaces that optimize performance and encourage collaboration and engagement. The following guidance will help owners and property managers keep tenants happy.
Architects | Jan 29, 2020
Frank Lloyd Wright’s architecture school is closing
The school was established in 1932.