Magazine article Mortgage Banking

Fitch: Modest Growth for Non-Residential Construction into 2015

Magazine article Mortgage Banking

Fitch: Modest Growth for Non-Residential Construction into 2015

Article excerpt

A report from Fitch Ratings, New York, expects the U.S. non-residential construction activity to grow modestly in 2014 and 2015 following a sluggish 2013.

Fitch's report, Measuring Wheel, said strong activity in the commercial construction sector is driving non-residential spending, which increased by 12.9 percent to $187.5 billion during the first seven months of this year after a slight increase (1.2 percent) in 2013.

"Continued improvement in commercial real estate fundamentals and a slight easing in bank credit lending standards will likely drive higher commercial construction activity further," said Fitch Director Robert Rulla.

The report projects private non-residential construction spending to grow by 8 percent in 2014 and 6 percent in 2015.

In its second-quarter 2014 Commercial Real Estate Chartbook, released in September, Charlotte, North Carolina-based Wells Fargo Securities said that multifamily construction, driven in part by a drop in the U.S. homeownership rate, rose to record levels so far this year, followed closely by industrial construction.

And Cassidy Hirley, Washington, D.C., noted in its recent Over- or Under-Building? report that year-over-year growth in the value of construction underway has been in double-digits for nearly 30 consecutive months, with the multifamily sector seeing year-over-year growth of 65 percent. …

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