Five-year outlook for US construction industry looks brighter

According to a new report by Timetric’s Construction Intelligence Center (CIC), London, the U.S. construction industry is set to pick up over the next five years.

Timetric forecasts that the construction sector’s average annual growth is set to accelerate in real terms from 1.7 percent during the review period to 3.1 percent over the forecast period, increasing from $1 trillion in 2014 to $1.1 trillion in 2019 in real terms. Investments to modernize the country’s aging infrastructure and renewable energy sector alongside the growing population, which will generate demand for residential buildings, will be some of a number drivers of this growth.

Residential construction was the largest market during the review period and will retain this position, mainly supported by the government’s plans to increase the budget allocation by 1.9 percent to $46.7 billion in 2015. The budget will support homeownership, sustainable community development and access to affordable housing to protect homeless and vulnerable families. Moreover, the country’s total population is expected to increase from 321.2 million in 2010 to 338 million by 2020, which is expected to further increase demand for housing over the forecast period.

Energy and utilities will continue holding its position as the second largest market in the US construction industry. The government aims to increase the renewable energy in the country’s total electricity mix, from 9.8 percent in 2014 to 20 percent in 2020. It is also planning the installation of 10,000 megawatts (MW) of renewable capacity in subsidized housing by 2020, and 3.0 gigawatts (GW) in military capabilities by 2025.

Commercial construction will also support the growth of the construction industry and will expand over the forecast period driven by improving economic conditions, an increase in consumer spending, and government investment in tourism, office and retail buildings.

Timetric is a provider of online data, analysis and advisory services on key financial and industry sectors. It provides integrated information services covering risk assessments, forecasts, industry analysis, market intelligence, news and commentary. More information is available at www.timetric.com.