Trade association expects nonresidential construction to grow by 5.2 percent in 2013
- December 4, 2012
Associated Builders and Contractors (ABC) released its 2013 economic forecast for the U.S. commercial and industrial construction industry on Tuesday, and the news was good. The Washington, D.C.-based association expects the continuation of a modest recovery for nonresidential construction next year with some sectors, such as office construction, growing by 10 percent.
“ABC predicts nonresidential construction spending will expand 5.2 percent in 2013,” ABC Chief Economist Anirban Basu, said in a statement. “Given the remarkably deep reductions in nonresidential construction spending since the onset of the downturn, one would expect more robust growth during the fourth year of broader economic recovery.
“Thanks to a handful of segments experiencing more rapid economic recovery, much of the construction expansion next year will be in categories heavily associated with private financing,” Basu said. He added that constrained capital budgets at state and local government levels, as well as ongoing turmoil in Washington, D.C., will impact publicly funded construction with spending expected to be flat next year, and perhaps worse.
“The fastest growing major U.S. industry during the last year in terms of absolute job creation was professional and business services,” said Basu. Because many firms in this category use office space, office-related construction spending is expected to rise 10 percent in 2013.
According to the ABC report, industries positioned to experience rising levels of investment include power, up 10 percent; lodging, up 8 percent; health care, up 5 percent; and manufacturing, up 5 percent.
Nonresidential building construction employment also is expected to expand next year, by 2.1 percent, which is slightly better than the 1 percent performance estimated for 2012. Basu looks for construction material prices to rise a bit more rapidly in 2013 than they did in 2012, with substantially more volatility.