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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.

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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.

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