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3 Stocks Poised to Profit From Trends in Construction

Total non-residential-construction spending is likely to disappoint over the next decade, but growth in construction-heavy industries like manufacturing and highways bodes well for some companies.

3 Stocks Poised to Profit From Trends in Construction
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Kristoffer Inton: The Great Recession ravaged non-residential-construction spending. Nonresidential construction, which includes everything from hospitals to highways and everything in-between, has recovered slowly and unevenly. Spending remains well below prerecession peaks on a nominal basis and below-average levels on a real basis. Consensus expectations are for high-single-digit to low-double-digit growth over the next several years, as the non-residential-construction share of GDP recovers to long-term historical averages. 

While we do expect strong recovery in the near term as pent-up demand is unleashed, our bottom-up analysis reveals a secularly diminished need for new construction in many key sectors for the next decade.

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Kristoffer Inton does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.