CHICAGO--(BUSINESS WIRE)--The U.S. nonresidential construction activity is expected to grow modestly in 2014 and 2015 after a sluggish 2013, according to Fitch Ratings in a new report.
Driving the growth is the strong activity in the commercial construction sector. Private nonresidential construction spending increased 12.9% to $187.5 billion during the first seven months of 2014 after a slight increase (1.2%) in 2013.
'Continued improvement in commercial real estate fundamentals and a slight easing in bank credit lending standards will likely drive higher commercial construction activity further,' said Director Robert Rulla. Fitch projects private nonresidential construction spending will grow 8% in 2014 and 6% in 2015.
Conversely, Fitch expects public construction spending will remain relatively weak during 2014 and into 2015. However, street and highway spending will advance at a faster pace. Congress recently extended the current highway bill to May 31, 2015, which provides some certainty for funding in the short-term. Nonetheless, the industry needs a long-term highway bill with guaranteed funding to encourage state and local governments to undertake long-term highway projects. Additionally, state and local governments have taken a more active role in seeking revenue sources to fund infrastructure spending. Fitch projects public construction spending will increase 1% in 2014 and 3% in 2015.
The latest edition of Fitch's 'Measuring Wheel' is available by clicking on the above link or by visiting 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research: Measuring Wheel (The U.S. Nonresidential Construction Industry -- 2014/2015)