Table of Contents

1 EXECUTIVE SUMMARY

2 CONSTRUCTION OUTLOOK: AT-A-GLANCE

3 LATEST NEWS AND INDICATORS

4 KEY DRIVERS AND RISKS

• 4.1. Economic Performance
• 4.2. Political Environment
• 4.3. Demographics
• 4.4. Risk Profile

5 CONSTRUCTION OUTLOOK

• 5.1. All Construction
  • 5.1.1. Outlook
  • 5.1.2. Project analytics
• 5.2. Commercial Construction
  • 5.2.1. Outlook
  • 5.2.2. Project analytics
• 5.3. Industrial Construction
  • 5.3.1. Outlook
  • 5.3.2. Project analytics
• 5.4. Infrastructure Construction
  • 5.4.1. Outlook
  • 5.4.2. Project analytics
• 5.5. Energy and Utilities Construction
  • 5.5.1. Outlook
  • 5.5.2. Project analytics
• 5.6. Institutional Construction
  • 5.6.1. Outlook
  • 5.6.2. Project analytics
• 5.7. Residential Construction
  • 5.7.1. Outlook
  • 5.7.2. Project analytics

6 KEY INDUSTRY PARTICIPANTS

• 6.1. Contractors
• 6.2. Consultants

7 APPENDIX

• 7.1. What is this Report About?
• 7.2. Definitions

8 ABOUT GLOBALDATA

• 8.1. GlobalData at a Glance
• 8.2. GlobalData Construction
• 8.3. Disclaimer

Construction in the US - Key Trends and Opportunities to 2023

Summary

Following weak growth in 2017, construction growth in the US accelerated in 2018, owed in part to corporate tax cuts and increased infrastructure investment by state and local governments. As a result, the country’s construction industry grew by 2.2% in real terms in 2018, compared to 0.4% in 2017. However, growth is projected to decelerate this year to 0.5% in 2019, largely due to a decline in residential investment and heightened policy uncertainty from the recent escalation of the US trade war with China, which is weighing on business sentiment and holding back investment in major construction projects.

On 1st August, President Donald Trump announced that he would impose a new 10% tariff on a further US$300 billion of imported Chinese goods, ranging from clothes to smartphones, marking a sharp escalation of the ongoing trade war between the two countries. This new round of tariffs is in addition to the current tariffs of 25% on US$250 billion of Chinese imports. Already, construction companies across the country are shifting supply chains and delaying capital expenditure as a result of the previous US tariff increases on Chinese products and foreign metals. This latest announcement of tariffs on Chinese imports, together with the effects of previous tariffs, will further undermine business confidence, and likely lead to weaker construction growth.

Growth is expected to recover to a compound annual growth rate (CAGR) of 1.1% over the remainder of the forecast period, supported by rising investments in infrastructure and energy and utilities projects.

- GlobalData expects the residential construction market to contract by 2.3% in 2019, before recovering to an annual average of 4.4% over the remainder of the forecast period. Despite falling mortgage rates, a solid job market, and a rising demand for mixed-use properties that is still supporting the housing market, expensive land, a lack of skilled labor and rising material prices (brought about by ongoing trade dispute between the US and China) are adding pressure to home prices and causing delays in home construction, as developers’ incentive to build affordable houses is being reduced.

- GlobalData expects the forecasts period growth in the commercial construction market will decelerate to an annual average of 3.3% over the forecast period, down from 13% during the review period. In recent years, the growth of retail buildings construction has eased, owning in large part to the changing way US consumers are now shopping online through e-commerce giants such as Amazon and eBay. At the same time, slower economic growth and the effects of the increasing uncertainty generated by the recent escalation of the US trade war with China is further undermining consumer and business confidence.

- GlobalData expects the infrastructure construction market to record a forecast-period CAGR of 6.83% in nominal terms. Increasing demand for new infrastructure and maintenance works, along with urbanization growth and the rise in e-commerce, is creating significant investment opportunities, especially for the transportation sector. In July 2019, under the Infrastructure for Rebuilding America (INFRA) discretionary grant program, the US Department of Transportation (DOT) granted US$856 million to develop railway and related infrastructure. Of the total investment, the government agreed to spend US$135.5 million towards the rebuilding of two railway corridors in the country.

- Energy and utilities construction market’s growth over the forecast-period will be supported by the government’s investments to develop utilities infrastructure in the country. The 2020 budget has allocated funds to the Department of Agriculture to help maintain and modernize rural utilities by providing critical support for infrastructure, such as US$528 million in funding for water and wastewater grants and loans that support US$1.2 billion in water and wastewater direct loans.

- The total construction project pipeline in the US - as tracked by GlobalData, and including all mega projects with a value above US$25 million - stands at US$852.2 billion. The pipeline, which includes all projects from pre-planning to execution, is relatively skewed towards late stage projects, with 58.7% of the pipeline value being in projects in the pre-execution and execution stages as of October 2019.

GlobalData’s Construction in the US - Key Trends and Opportunities to 2023 report provides detailed market analysis, information and insights into the US construction industry, including -
- The US construction industry's growth prospects by market, project type and construction activity
- Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in the US construction industry
- Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.

Scope

This report provides a comprehensive analysis of the construction industry in the US. It provides -
- Historical (2014-2018) and forecast (2019-2023) valuations of the construction industry in the US, featuring details of key growth drivers.
- Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
- Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
- Listings of major projects, in addition to details of leading contractors and consultants

Reasons to buy

- Identify and evaluate market opportunities using GlobalData's standardized valuation and forecasting methodologies.
- Assess market growth potential at a micro-level with over 600 time-series data forecasts.
- Understand the latest industry and market trends.
- Formulate and validate strategy using GlobalData's critical and actionable insight.
- Assess business risks, including cost, regulatory and competitive pressures.
- Evaluate competitive risk and success factors.