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New Market Research Report: United States Infrastructure Report Q1 2014

New Construction market report from Business Monitor International: "United States Infrastructure Report Q1 2014"


Boston, MA -- (SBWIRE) -- 01/27/2014 -- BMI View: In line with our long held view that the residential construction sector would drive the recovery in the US construction industry, we believe 2014 will see another positive year for growth in the sector. Real industry value is expected to expand by 1.4%, driven primarily by a 1.6% expansion in residential and non-residential building. Conversely, infrastructure, weighed down by weak public sector spending and a lack of political support, we remain the weak spot, and see its contribution to overall industry value contract to 29.3%.

Our outlook for the US construction industry remains largely the same, except for a slight upgrade in our estimate for 2013 growth (to 2.2%). We anticipate 2014 will see another year where residential construction is the strongest element, although a natural slowing in the pace of the sector's recovery is expected, which should see overall growth trend lower over our forecast period.

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Key developments:

- The residential construction sector continues to expand. As anticipated data has been and will continue to be mixed, however, overall the trend is for continued recovery in the sector. Housing starts reached 1,091,000 in November 2013, while homebuilder confidence, housing sales and home prices are all trending upwards. While the sector has come a long way since 2011, there is considerable room for further expansion, housing starts remain considerably below the peak of 2,273,000 in January 2006 and we are beginning to see a decline in sales inventory of existing homes, indicating demand and supply are being rebalanced. Consequently, we are forecasting residential construction to continue to positively contribute to the overall construction industry value.
- Power and transmission infrastructure industry value will see a stabilisation in 2014, following a steep drop in investment in 2013 resulting from the expiration of broad based tax incentives for renewable projects. We see some potential for value creation over the medium term from retrofitting and safety upgrades to nuclear power plants, as well as major transmission projects to hook up new renewable supply. However, much will depend on new legislation guiding existing coal fired power plants, due in mid 2014, to indicate the future of electricity sector investments in the US.
- Oil and gas pipelines will remain the outperformer in the energy & utilities infrastructure segment. With crude and natural gas production continuing to expand, and growing capacity issues and safety concerns over carrying crude by rail, we anticipate investment into new pipelines to be necessary.

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