2013-02-22 14:10:11 - Recently published research from Business Monitor International, "United States Infrastructure Report Q1 2013", is now available at Fast Market Research

BMI View: Q4 2012 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, leaving 2013 real growth lower than 2012. Residential construction will remain the main driver of the overall construction sector as nonresidential 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, however we anticipate it to remain in positive territory.

Construction spending data for the first ten months of the year

shows a significant increase in investment in the sector, which indirectly feeds through to our forecast for construction industry value added. Between January and October 2012 construction spending has increased 7.5% year-on-year (y-o-y), making it the first year of growth in construction investment since 2006.


Full Report Details at
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Residential Boom

Since Q2 2011 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 12.4% in the first ten months of 2012 (compared to 10M 2011).

Housing starts appear to have bottomed out and a nascent recovery has been underway over 2012, hitting a four-year high in October at 894,000. 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 has been in a strong uptrend for most of 2012, this has motivated investment into new capacity. In 2013, the outlook could be weaker. November 2012 saw the first month of contraction in US PMI since July 2009, although it is unclear yet if this is the start of a longer trend.

Infrastructure: Divergent Trends

In general the outlook for the infrastructure sector is weak. The November 2012 elections saw effectively no change in the political landscape in the US. This implies further gridlock for spending plans indicating no infrastructure investment is likely over the next 18 months.

Transport will definitely be the hardest hit, as it is the most reliant on government spending. Whilst the passing of the US$105bn surface transportation bill in July 2012 is a good sign for public investment into the sector, at least for the short term, the biggest upside is from expanding private sector participation. The bill includes expanding TIFIA which has proven crucial in enabling transport PPPs. Indeed, over 2012 we have seen a number of new PPPs in the roads and bridges sector progress. The most recent contract of this type to be awarded was in November 2012 for the US$1bn Ohio River Bridges East End Crossing 35 year DBOM contract. The winning bidder was the WVB East End Partners consortium comprising Vinci, Walsh Investors and Bilfinger Berger.

Energy & Utilities on the other hand has a slightly better outlook, with oil & gas pipeline projects expected to boost infrastructure industry value over the medium term off the back of a boom in unconventional production. This should replace the decline in industry value resulting from a sharp decline in renewable projects following the expiration of incentives.

Partial Table of Contents:

BMI Industry View
SWOT
Industry Forecast
- Construction And Infrastructure Forecast Scenario
- Table: US Construction And Infrastructure Industry Data, 2010 - 2016
- Table: US Construction And Infrastructure Industry Data, 2015 - 2021
- Transport Infrastructure - Outlook And Overview
- Table: US Transport Infrastructure Industry Data, 2010 - 2016
- Table: US Transport Infrastructure Long Term Forecast, 2015 - 2021
- Transport Infrastructure Outlook And Overview
- Table: Selection Of US Road PPPs
- Table: High-Speed Rail Funding Awards
- Major Projects Table - Transport
- Table: Major Projects - Transport
- Energy And Utilities - Outlook And Overview
- Table: US Energy and Utilities Infrastructure Industry Data, 2010 - 2016
- Table: US Energy and Utilities Infrastructure Industry Data, 2015 - 2021
- Energy And Utilities Infrastructure Outlook And Overview
- Table: Renewable Targets By State - US States With Renewable Power Targets
- Major Projects - Energy And Utilities
- Table: Major Projects - Energy and Utilities
- Residential and Non-Residential Building - Outlook and Overview
- Table: US Residential and Non-Residential Building Forecasts, 2010-2016
- Table: US Residential and Non-Residential Building Forecasts, 2015-2021
- Table: Residential, Non-Residential and Social Infrastructure Projects
Industry Risk Reward Ratings
- United States Risks/Reward Ratings
- Regional Industry Risk Reward Ratings
- Europe: Macroeconomic Woes Remain Ongoing
- US: Recovery On Track
- Australia: Downgrade Potential Growing
- Canada: Plenty Rewards To Realise
- Table: Developed States Infrastructure Risk Reward Ratings
Market Overview
- Special Focus: Fixing America's D-Grade Infrastructure
- Table: Still Flunking - American Society Of Civil Engineers Report Card For US Infrastructure
- Special Focus: PPPs - An Emerging Market
- Table: List Of Highway PPP Projects In The State Of Virginia
- Table: Case Study: Port of Miami Tunnel
- Table: Case Study: I-595 Corridor Improvement Project
- Table: List Of Highway PPP Projects In The State Of Florida
- Table: Case Study: North Tarrant Express
- Table: List Of Highway PPP Projects In The State Of Texas
- Special Focus: Infrastructure Financing
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Full Table of Contents is available at:
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