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
Market Data | Dec 15, 2015
AIA: Architecture Billings Index hits another bump
Business conditions show continued strength in South and West regions.
Architects | Dec 14, 2015
New LEGO line lets builders construct iconic skylines
New York City, Berlin, and Venice are featured in the Architecture Skyline Collection.
Architects | Dec 14, 2015
Date named for announcement of 2016 Laureate of the Pritzker Architecture Prize
The Laureate will be named the morning of January 13.
Architects | Dec 9, 2015
Architecture firms Cooper Carry and The Johnson Studio merge
The combination is expected to bolster each firm’s hospitality-related services.
Industry Research | Dec 8, 2015
AEC leaders say the 'talent wars' are heating up: BD+C exclusive survey
A new survey from Building Design+Construction shows that U.S. architecture, engineering, and construction firms are being stymied by the shortage of experienced design and construction professionals and project managers.
Architects | Dec 4, 2015
Denise Scott Brown and Robert Venturi win 2016 AIA Gold Medal Award
The husband and wife architect team—founders of VSBA Architects and Planners—are the award's first joint winners.
Architects | Dec 3, 2015
LMN Architects wins 2016 AIA Architecture Firm Award
The firm is known for projects like Vancouver Convention Centre West and the University of Washington’s Foster School of Business.
Greenbuild Report | Dec 1, 2015
Data centers turn to alternative power sources, new heat controls and UPS systems
Data centers account for 2% of the nation’s electricity consumption and about 30% of the power used annually by the economy’s information and communications technology sector, according to the National Renewable Energy Laboratory.
Greenbuild Report | Nov 30, 2015
10 megatrends shaping the future of green building
Increased competition among green building rating systems, the rise of net-zero buildings, and a sharper focus on existing structures are among the trends that will drive sustainability through 2020, according to author and green building expert Jerry Yudelson.
Contractors | Nov 24, 2015
FMI survey: Millennials in construction get a bad rap, tend to be loyal, hard-working
While the stigma exists that Millennials are entitled, disloyal, and lazy, it appears that this is not true, according to a new report from FMI.