Fitch: Activity Surges for U.S. Nonresidential Construction

CHICAGO--(BUSINESS WIRE)-- The first eight months of 2015 showed strong activity for U.S. private nonresidential construction, with the rate of spending to remain relatively robust through next year, according to Fitch Ratings in a new report.

Through the January-August 2015 period, private nonresidential construction spending grew 12.1% over the prior year. This follows an 11.3% improvement during 2014. 'Construction spending was especially robust for manufacturing, office and lodging properties,' said Director Robert Rulla. 'Healthy property level fundamentals are likely to help sustain the recovery in this sector in the intermediate term.' Fitch expects spending in this sector will advance 8.5% this year and 7% next year.

Another bright spot has been public construction spending, which has showed a pick-up in activity over the past year. Public construction spending is up 5.8% through the first eight months of 2015 and is 5.3% higher for the trailing twelve month period. Fitch expects public construction spending will increase 4.3% during 2015, with highway and street spending possibly advancing at a faster pace.

The growth in highway and street spending is somewhat tempered by the lack of a long-term highway program. In July 2015, President Barack Obama signed another short-term extension for the current highway bill to ensure funding through the end of October. 'While the latest stop-gap extension provides some relief, the risk of short-term extensions in lieu of a long-term funding program may make some states reluctant to begin long-term projects unless there is a reasonable expectation that funding will be available to complete them,' said Rulla.

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'.

Measuring Wheel (The U.S. Nonresidential Construction Industry 2015￢2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=871455

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View source version on businesswire.com: http://www.businesswire.com/news/home/20151006006419/en/

Fitch Ratings
Robert G. Rulla, CPA
Director
+1-312-606-2311
Fitch Ratings, Inc.
70 W. Madison St.
Chicago, IL 60602
or
Robert P. Curran
Managing Director
+1-212-908-0515
or
Media Relations:
Sandro Scenga, +1 212-908-0278
[email protected]

Source: Fitch Ratings

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