Construction-Put-In-Place Could Top $1 Trillion in 2014

Words: Dan KamysConstruction-Put-In-Place Could Top $1 Trillion in 2014

FMI, a provider of management consulting and investment banking to the engineering and construction industry, announces the release of its 2013 U.S. Markets Construction Overview. With construction-put-in-place (CPIP) at the end of 2012 expected to be between $826 to $884 billion, researchers at FMI predict CPIP growth rates to be slightly ahead of GDP in 2013 and 2014. This would place the CPIP at more than $1 trillion by the end of 2014, nearly 6 percent of GDP.

Other predictions include:

Power CPIP of nearly $100 billion, as well as environmental remediation and conservation work of nearly $7 billion are already at all-time highs
Residential CPIP will be back to double-digit growth in 2013
Transportation and healthcare CPIP will reach record levels by 2013
Education CPIP will continue to rise achieving 2008 numbers by 2016

However, in 2013 commercial buildings, offices, manufacturing facilities, communications systems and lodging CPIP are expected to continue to underperform at an average of 60 percent of 2008 levels, off by more than $115 billion. By 2016 these sectors are predicted to only reach 70 percent of 2008 CPIP. In addition, excitement over the double-digit growth in residential construction is also balanced with the disappointment that by 2016 residential CPIP will still only be at 65 percent ($200 billion behind) the record high in 2006.

Private equity investors increased attraction to smaller deals. Half of all deals in 2012 are valued at less than $50 million and about 95% of deals are less than $500 million.

Construction-Put-In-Place Could Top $1 Trillion in 2014

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