FMI released today its first quarter 2013 construction outlook report. Although the strength of individual markets is shifting, the forecast for total construction-put-in-place for 2013 continues to show an increase of 8% over 2012 levels. The $918,897 million estimate is a solid improvement, but FMI does not expect to return to the days of annual construction above the trillion-dollar mark until 2015.
The star of the show is residential buildings with a 23% rise in single-family buildings. While much of business sector is still in wait-and-see mode, some industries are breaking the mold and planning for growth. Commercial, lodging and office construction are starting to pick up.
The rich shale regions of the country are seeing a lot of construction activity. With oil and gas exploration booming, these regions are in need of housing, as well as the construction of roads, rail and pipelines to move the product from the fields to refining and distribution sites.
In addition, the potential for greater energy independence and lower energy prices is helping to make the U.S. more competitive in the global market and enticing more manufacturing to relocate in the United States.
Single-family housing put in place grew 19% in 2012, and FMI expects another 23% growth to reach $161 million by the end of 2013. Multifamily construction improved a whopping 47% in 2012, with FMI looking for another 31% in 2013.
After three years of steep declines, the market for lodging construction came back a strong 25% in 2012 and FMI expects another 10% growth in construction put in place for 2013. Office construction is finally showing a solid but slow turnaround with 5% growth in 2012 and another 5% increase expected in 2013. Commercial construction is the third largest nonresidential construction market behind education construction and manufacturing construction. That is why it is good to see that it continues into its third year of good growth, moving up 8% in 2012 and looking for another 7% to reach $50.3 billion in 2013.
Health care construction was moderate in 2012, growing only 3%, but FMI expects it to pick up in 2013 to 8% to $44.2 billion construction put in place for the year. Manufacturing construction increased 17% in 2012. It will continue with another 6% increase for 2013 through 2014. Construction for the power market grew 9% in 2012 and will continue to grow between 8% and 9% through 2017.
To download a copy of the full report, click here.