Firm scales back 2015 construction outlook

Construction activities are expected to grow at 5 percent this year, FMI Corp. reports, leveling off from a previous forecast of 8 percent that the firm produced.

Although the new prediction is significantly lower than last quarter, FMI reports that the rate is still the highest total for construction put in place since 2008.

“Construction spending continues to build on the rapid growth experienced in the industry last year,” says Chris Daum, senior managing director and president of Investment Banking at FMI.

The report provides forecasts for 17 sectors across residential, non-residential and non-building groups. Areas with strong growth forecasted are residential, manufacturing, commercial, amusement and recreation, office, lodging and transportation.

The sector with the highest growth prospect is manufacturing, FMI reports. FMI expects another 17 percent growth for 2015 in that sector after seeing 15 percent growth in manufacturing construction in 2014. Manufacturing continues to show gains in construction activity despite several factors that point to slower growth for 2016 through the forecast horizon of 2019, the firm adds. That’s partly due to the cyclical nature of industry, the firm says, as well as the sudden change in the value of the dollar affecting exports.

According to FMI, the sector to experience the biggest setback is power. The firm expects power to scale back 5 percent. That industry is in flux, FMI says, because of changing fuel supplies using more natural gas and less coal, as well as variable rates of growth in alternative energy sources such as solar and wind.