New Construction market report from Business Monitor International: "United States Infrastructure Report Q2 2013"

Boston, MA -- (SBWire) -- 06/03/2013 --Whilst we anticipate growth in the US construction sector to slow in 2013, following a strong rebound estimated in 2012, there are bright spots in the industry.

The sheer size of the US construction sector, means even low growth is positive, especially considering the seven-year recession seen between 2005 and 2011. Residential building will continue to be the growth engine behind the sector, whilst non-residential building is also contributing positively. The weak spot will remain the infrastructure sector.

Q412 data is underlining our view that the US construction industry is experiencing growth for the first time in seven years. Whilst momentum is strong going into 2013, we believe that in the second half of 2013, base effects will precipitate a natural slowing in growth. This will result in full-year real growth of 1.3% in 2013, slowing to 0.9% in 2014.

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Residential construction will remain the main driver of the overall construction sector as non-residential experiences mixed fortunes and infrastructure only flat growth. In the latter sector there are bright spots, primarily stemming from the unconventional energy boom. Over the medium term (2013-2017), growth will slow, to an average annual rate of 0.7%; however, we anticipate it to remain in positive territory.

We have revised up our 2012 estimate, although keeping closely in line with our long-held view for a rebound in growth in 2012. Over 2012, the overall construction sector saw 11.0% growth in overall construction spending, driven by the residential building sector. Consequently, we estimate 3.4% real growth in construction industry value (net output).

Residential Boom

Since Q211, we have been highlighting that 2012 would see a return to construction sector growth driven by a recovery in the residential construction sector. Residential construction spending has been the biggest driving force for over growth, expanding by 15.6% in 2012. Housing starts have firmly bottomed out, and a nascent recovery has been underway over 2012 and into 2013, hitting four-year highs. Strong homebuilder confidence indicates further upside ahead leading us to envisage continued strength in residential construction in 2013.

Non-Residential Mixed Outlook

Non-residential construction has also had a strong year, driven by investment into manufacturing facilities. As the US manufacturing sector was in a strong uptrend for most of 2012, this has motivated investment into new capacity. Given our positive view on a revival in the US manufacturing sector, we anticipate this investment into new facilities to continue. At the same time, our outlook for industrial construction is strong, based on significant ongoing investment into hydrocarbons, specifically oil.

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