Source: FMI, Raleigh, N.C.
In its Q1-2014 Construction Outlook, management consulting and investment banking services provider FMI tracks construction put-in-place activity, projected at 8 percent growth this year over 2013, and offers an early gauge on key sectors:
- Residential—Although the market is forecasted to grow, the pace is slowing. Forecasts show an 18 percent growth in single-family construction. However, multifamily construction will show a 27 percent increase in 2014, a drop from the 44 percent increase in 2013.
- Commercial—Investors are beginning to help lift this sector out of a slump by taking more risks. The industry is expected to grow another 7 percent in 2014 to $52.6 billion, the highest mark since 2008.
- Health Care—Construction will grow 2 percent in 2014, however a jump to 6 percent is predicted in 2015 as the outcomes on new health care regulations become clearer.
- Educational—Improving state and local budgets will help move educational construction back into the growth mode; 2014 will see a 3 percent level of growth to $83 billion.
- Power—Growth to $91.2 billion is forecast for 2014 with a slow climb from 5 percent to 9 percent over the next four years. The cost of new nuclear power will continue to hinder growth until regulatory concerns are considered.
- Manufacturing—With signs of sustainable growth, predictions are for 5 percent in 2014 to $45.2 billion, followed by an 8 percent gain in 2015.
- Lodging—The industry forecasts 591 hotels opening in 2014 versus 500 last year. Growth at 13 percent is expected with this market reaching $16.1 billion.
- Transportation—2014 will see a 7 percent improvement to $4.4 billion. With the president’s 2015 budget proposal of $73.61 billion for surface transportation spending, the sector brightens in the coming years.
The FMI Q1-2014 Construction Outlook is available as a free download here.