BMI View: While we expect growth to remain positive, normalization in homebuilding and weakness in certain segments of non-residential construction will see a deceleration in US construction industry growth. The infrastructure sector, however, presents a more positive outlook as the FAST Act will increase federal spending on transport and both major party presidential candidates have called for increased investment.
Latest Updates And Structural Trends
Value put in place in the US construction industry has begun to drop off after a strong Q1, aligning with our view for a slowdown. We forecast 3.2% real growth for 2016, which will slow to 2.4% in 2017.
The Fast Act, a five-year surface transportation bill passed in December 2015, will help drive transport infrastructure growth by increasing federal spending (average of 3.5% increase annually over next five years) and giving state and local governments budget clarity.
We also highlight potential upside to our forecasts:
Both candidates in the November election have pledged to support infrastructure, posing upside potential to our forecasts. Democratic nominee Hillary Clinton has announced a USD275bn infrastructure spending plan; on the other hand, while his policies remain less clear, the Republican nominee Donald Trump, has alluded to a USD1trn plan.
If successfully turned into law, the provisions included in the Energy Policy Modernization Act will create a regulatory framework conducive to strengthening, modernizing and expanding the country's electricity grid - something that we have long highlighted as crucial for the growth of the US power sector.
|f = BMI forecast. Source: US Department of Commerce, Bureau of Economic Analysis, BMI|
|Construction industry value, USDbn||716.90||752.86||785.49||818.72||852.34||888.01||922.83||959.84||996.73||1,037.10||1,080.85|
|Construction Industry Value, Real Growth, % y-o-y||5.00||3.23||2.38||2.18||2.01||2.08||1.82||1.91||1.74||1.95||2.12|
|Construction Industry Value, % of GDP||4.0||4.0||4.0||4.0||4.0||4.0||4.0||3.9||3.9||3.9||3.9|
The US's infrastructure RRI score has increased slightly this quarter to 63.6 with improvements for the outlook in the infrastructure sector.
For Industry Rewards, the US scores 42.5 out of 100, reflecting our expectations for modest, but positive growth rates in the industry over our 10-year forecast period to 2025.
The US receives its best scores for Country Risks, and Industry Risks, 89.0 and 75.0 out of 100 respectively, due to long-term policy continuity and a business-friendly environment.
|Risk/Reward Index||Rewards||Industry Rewards||Country Rewards||Risks||Industry Risks||Country Risks|
The United States Infrastructure Report features BMI Research's market assessment and forecasts covering public procurement and spending on all major infrastructure and construction projects, including transportation and logistics by land, sea and air; power plants and utilities, and commercial construction and property development. The report analyses the impact of regulatory changes and the macroeconomic outlook and features competitive intelligence on contractors and suppliers.
BMI's United States Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the American infrastructure and construction industry.
- Benchmark BMI's independent infrastructure industry forecasts for United States to test other views - a key input for successful budgetary and planning in the American infrastructure market.
- Target business opportunities and risks in the American infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in United States.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis covering infrastructure and construction, regulatory changes, major investments and projects and significant national and multinational company developments. These are broken down into construction (social, commercial and residential), transport (roads, railways, ports, airports, etc), and energy & utilities (powerplants, pipelines and so on).
Industry SWOT Analysis
Analysis of the major strengths, weaknesses, opportunities and threats within the infrastructure and construction sectors and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (up to 2012) and forecasts to end-2024 for all key industry indicators, supported by explicit assumptions, plus analysis of key developments in the market and risks to the main forecasts. Indicators include:
Construction: Industry value (USDbn); contribution to GDP (%); total capital investment (USDbn); real growth (%).
Construction industry real growth forecasts (%) and industry value (USDbn) forecasts for industry sectors are split into Residential and Non-residential and Infrastructure sectors. Where the data is available for particular countries the infrastructure is further broken down into indicators for the transport subsectors of roads, railways, airports and ports and the energy and utilities sub-sectors of power plants and transmission grids, oil & gas pipelines and water infrastructure. This dataset is unique to the market.
The reports also include analysis of latest projects across the infrastructure sectors (transport, utilities, commercial construction).
BMI’s Infrastructure Risk Reward Index
BMI’s Risk Reward Index provides investors (construction companies, suppliers and partners) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points. These provide indices of highest to lowest appeal to investors, with each position explained.
An assessment of the competitive landscape and key challenges to entering the market. Details of the largest companies active in the sector across the sub-segments of the industry, including the key financial figures from some of the largest players in the sector.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
The Infrastructure reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.