Builders association expects further economic growth in 2015

Associated Builders and Contractors (ABC) forecasts a steady and ongoing economic recovery for the U.S. commercial and industrial construction industries in 2015. The industry recovery that took place this year should continue in 2015, ABC says, with momentum growing in segments related to the energy and industrial production resurgence.

“ABC forecasts nonresidential construction spending will expand by roughly 7.5 percent next year,” says Anirban Basu, ABC chief economist. “The segments that will experience the largest growth in construction spending in 2015 include power, lodging, office space and manufacturing.”

The public sector will see far more sluggish growth in construction spending, Basu added.

“However, this fits a multi-year pattern with private nonresidential spending exceeding public nonresidential spending by 28 percent in 2014, up from 15.6 percent in 2013,” Basu says.

In addition, while material price inflation has been suppressed, it may accelerate in 2015, according to Basu. Last year, prices were suppressed due to a combination of factors, such as softer growth in most of Europe and Asia, rising energy production in the U.S., and a stronger dollar. Some of these factors might not be as prominent next year, Basu says, 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,” Basu says. “Contractors should continue to experience a lengthening backlog, and the industry should continue to see increases in nonresidential construction spending and employment growth.”