Global construction machinery is expected to experience explosive growth in 2023.
According to the 2021 Q3 outlook report on engineering and construction by the US FMI, although the construction economy did not experience a significant rebound in 2021, there was at least a trend of forward progress. Given the controversial election and the COVID-19 pandemic, any progress at this time could be considered a positive thing. For transportation construction, the outlook for the year 2022 and beyond has become particularly bright.
According to this report, the total expenditure on engineering and construction in the United States is expected to increase by 2% by the end of 2021, while the full-year figure for 2020 was 5%.
Residential investment, especially the construction and renovation of single-family homes, is the main driver of construction spending. Water supply was the only non-residential sector expected to experience strong growth in 2021, potentially increasing by 5%.
Multi-family housing, healthcare, communication, manufacturing, roads and streets, as well as sewage and waste treatment are considered stable. It is expected that they will grow at an inflation rate of approximately 0% to 4% by the end of 2021. It is expected that the combined growth of the public and private sectors at the end of the year will be roughly in line with inflation, and is also considered stable.
Confidence has increased.
In the third quarter of 2020, the Non-Residential Construction Index (NRCI) dropped below 40 for the first time since the 2008-09 financial crisis. There is no doubt that the decline was the result of the coronavirus pandemic, the government's confusion over how to handle it, and widespread layoffs and lockdowns.
By the third quarter of 2021, the index had risen sharply to 59.7, indicating that optimism will continue and intensify in the remainder of 2021. According to FMI, the recent reading suggests that future engineering and construction opportunities will increase. (A reading above 50 indicates an improvement or expansion in the industry situation. A reading of 50 indicates no change. A reading below 50 indicates a worse situation compared to the previous quarter.)
The house builder was in tears.
Compared with 2020, driven by the increase in core consumer prices, the historically low mortgage interest rates, and the shortage of inventory, the housing sector clearly emerged as the winner, with a growth forecast of 8%.
Among all the market segments, the biggest loser was the construction industry, which declined by 18% to 23.5 billion US dollars. It is expected to drop to 21.7 billion US dollars in 2021.
In terms of the actual dollar amount for residential construction, it is estimated to be 660 billion US dollars in 2020. For non-residential construction, the maximum amount could reach 524 billion US dollars, and for non-building-related activities, it could reach 281 billion US dollars.
Although transportation construction has experienced negative growth this year, it is expected to increase by 2% in 2022, followed by 9%, 13%, and 14% growth in the subsequent years, and will achieve the best performance annually by 2025.
The total construction projects in the United States are expected to reach 1.455 trillion US dollars in 2021. By 2025, this estimate is projected to increase to 1.776 trillion US dollars.
