Browse the complete Report on: United States Infrastructure Report Q3 2010
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In 2010, the US construction industry is forecast to emerge from a five-year decline, which reached its trough in 2009 at -9.9% year-on-year (y-o-y). Bolstered by the stimulus package, which is due to focus on projects in its second year, the industry is forecast to grow by 1.6% in 2010. Although this indicates only minimal growth, this is due to the influence of the still stagnant residential construction sector on the construction industry value. In turn, infrastructure, as a component of construction industry value, is forecast to outperform the sector as a whole, with 2.8% y-o-y growth anticipated for 2010.
- Construction industry value growth is to peak in 2011, as the majority of stimulus funding for projects is due to be disbursed in late 2010 and early 2011.
- Infrastructure is to outperform construction industry over the forecast period.
- Increasing private sector participation presents upside potential beyond 2011.
The US construction industry contracted by 9.9% y-o-y in 2009, which although substantial, was no great shock, being largely in line with BMI’s view for the industry. The figure concluded a five-year contraction in the industry, which has only posted real growth twice in the last nine years, and even then this was flat growth. This historic data illustrates what has been all too obvious on the ground: investment in the sector has been poor. This led the American Society of Civil Engineers (ASCE) to assign US’ infrastructure a D grade, defined as ‘poor’, in March 2009. The association estimates that US$2.2trn of investment is needed in the country’s infrastructure to get it up to scratch.
The American Recovery and Reinvestment Act (ARRA) otherwise known as the stimulus bill allocated tens of billions of dollars to infrastructure and construction projects in general. While the first half of the package focused on immediate economic measures, the second half is focused on projects, which means funds will filter through to the construction sector in the second half of 2010, therefore creating the biggest impact of industry value in 2011. For this reason we believe the industry will grow at a faster rate in 2011 (2.2% y-o-y) than in 2010 (1.6% y-o-y), the reverse of BMI’s view for the economy in general. Industry value will be created in 2010, driven by some projects which are receiving funds quicker than others – such as roads, a subsector, which we believe will post 4.9% y-o-y growth for the year. However, the majority of the large allocations for the sector, such as high-speed rail and large loan guarantees for power plants, will not translate to industry value creation until 2011 and beyond.
This view is backed up by figures for US construction spending, which, for the first time in over a year posted positive growth in March and April 2010. This indicates that investment is returning to the sector, although it is still only a fragile recovery.
Another observation from the data is that infrastructure spending has been higher than construction spending over the past 18 months. This data aligns with our core view that infrastructure will outperform the construction industry in general over our forecast period. The sector is being driven by stimulus funding. Infrastructure was cited as a crucial element of the package, although in reality the around US$100bn allocated was disappointing. However, it will be enough to drive growth in the sector. A growing number of private concessions in the sector will also create industry value, picking up where the public sector, constrained by tight local budgets, has been forced to leave off. Between 2010 and 2014, infrastructure is forecast to grow by 3.4% on average per year, compared to construction as a whole, which is anticipated to grow by 1.7% on average per year.
The stimulus boost is expected to lose its impact in late 2012-2013 – as the stimulus funds recede, it will be down to the private sector to pick up support for the industry. BMI notes that there is plenty of appetite from the private sector to pick up this mantle in the US. Construction companies have been falling over themselves to tap the US public-private partnership (PPP) sector for infrastructure, drawn in by the sophisticated business environment juxtaposed with a relatively untapped market. There are concerns over whether the US will let them in; however, a growing number of PPPs in the transport sector have been moving forward. If this trend continues, there is upside potential for our longer-term forecast for the industry to sustain growth and move out of the quagmire of the past 10 years.
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Tel: +1-888-989-8004
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Original Source : Infrastructure Market
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Browse All Business Monitor International Market Research Reports
In 2010, the US construction industry is forecast to emerge from a five-year decline, which reached its trough in 2009 at -9.9% year-on-year (y-o-y). Bolstered by the stimulus package, which is due to focus on projects in its second year, the industry is forecast to grow by 1.6% in 2010. Although this indicates only minimal growth, this is due to the influence of the still stagnant residential construction sector on the construction industry value. In turn, infrastructure, as a component of construction industry value, is forecast to outperform the sector as a whole, with 2.8% y-o-y growth anticipated for 2010.
- Construction industry value growth is to peak in 2011, as the majority of stimulus funding for projects is due to be disbursed in late 2010 and early 2011.
- Infrastructure is to outperform construction industry over the forecast period.
- Increasing private sector participation presents upside potential beyond 2011.
The US construction industry contracted by 9.9% y-o-y in 2009, which although substantial, was no great shock, being largely in line with BMI’s view for the industry. The figure concluded a five-year contraction in the industry, which has only posted real growth twice in the last nine years, and even then this was flat growth. This historic data illustrates what has been all too obvious on the ground: investment in the sector has been poor. This led the American Society of Civil Engineers (ASCE) to assign US’ infrastructure a D grade, defined as ‘poor’, in March 2009. The association estimates that US$2.2trn of investment is needed in the country’s infrastructure to get it up to scratch.
The American Recovery and Reinvestment Act (ARRA) otherwise known as the stimulus bill allocated tens of billions of dollars to infrastructure and construction projects in general. While the first half of the package focused on immediate economic measures, the second half is focused on projects, which means funds will filter through to the construction sector in the second half of 2010, therefore creating the biggest impact of industry value in 2011. For this reason we believe the industry will grow at a faster rate in 2011 (2.2% y-o-y) than in 2010 (1.6% y-o-y), the reverse of BMI’s view for the economy in general. Industry value will be created in 2010, driven by some projects which are receiving funds quicker than others – such as roads, a subsector, which we believe will post 4.9% y-o-y growth for the year. However, the majority of the large allocations for the sector, such as high-speed rail and large loan guarantees for power plants, will not translate to industry value creation until 2011 and beyond.
This view is backed up by figures for US construction spending, which, for the first time in over a year posted positive growth in March and April 2010. This indicates that investment is returning to the sector, although it is still only a fragile recovery.
Another observation from the data is that infrastructure spending has been higher than construction spending over the past 18 months. This data aligns with our core view that infrastructure will outperform the construction industry in general over our forecast period. The sector is being driven by stimulus funding. Infrastructure was cited as a crucial element of the package, although in reality the around US$100bn allocated was disappointing. However, it will be enough to drive growth in the sector. A growing number of private concessions in the sector will also create industry value, picking up where the public sector, constrained by tight local budgets, has been forced to leave off. Between 2010 and 2014, infrastructure is forecast to grow by 3.4% on average per year, compared to construction as a whole, which is anticipated to grow by 1.7% on average per year.
The stimulus boost is expected to lose its impact in late 2012-2013 – as the stimulus funds recede, it will be down to the private sector to pick up support for the industry. BMI notes that there is plenty of appetite from the private sector to pick up this mantle in the US. Construction companies have been falling over themselves to tap the US public-private partnership (PPP) sector for infrastructure, drawn in by the sophisticated business environment juxtaposed with a relatively untapped market. There are concerns over whether the US will let them in; however, a growing number of PPPs in the transport sector have been moving forward. If this trend continues, there is upside potential for our longer-term forecast for the industry to sustain growth and move out of the quagmire of the past 10 years.
About Us
ReportsandReports comprises an online library of 10,000 reports, in-depth market research studies of over 5000 micro markets, and 25 industry specific websites. Our client list boasts almost all well-known publishers of such reports across the globe. We as a third-party reseller of market research reports employ a number of marketing tools, such as press releases, email-marketing and effective search-engine optimization techniques to drive revenues for our clients. We also provide 24/7 online and offline support service to our customers.
Contact:
Ms. Sunita
7557 Rambler road,
Suite 727, Dallas, TX 75231
Tel: +1-888-989-8004
http://reportsandreports.blogspot.com/
http://reportsandreports.proarticles.co.uk/
http://reportsnreports.wordpress.com/
Original Source : Infrastructure Market
Buy Now : Market Research Report
