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Construction Spending Predicted to Rise; Highways to Remain Flat


According to FMI's First Quarter Construction Outlook Report, total engineering and construction spending for the United States is forecast to be 7 percent in 2018, compared to up 4 percent in 2017. Spending growth in 2018 is forecast to be led by residential and select nonresidential segments.

LN041617 outlookCurrent top-three-performing segments forecast in 2018 include residential improvements (+12 percent), single-family residential (+7 percent) and office (+9 percent). The bottom-three-performing segments include religious (-4 percent), sewage and waste disposal (-1 percent) and water supply (-3 percent).

Growth in several segments appears to be flattening out or stabilizing in 2018, including two prior high-growth segments from 2017, multifamily residential and lodging. Other stabilizing segments include manufacturing, power, and highway and street, all three of which were down through 2017. 

Federal funding for Highway and Street is expected to remain fl at. Positive indicators include the fact that states are successfully passing increased gas taxes and user fees; and rising interest rates could stall public-private-partnership opportunities.