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.