Industrial Report: Demand for specialty factories spurs industrial sector recovery

The industrial market doubled in the last four years but is still one-third smaller than the peak in 1998.

Jobsite construction spending for factories increased 11% during the past year, mostly for chemical and nonmetallic minerals facilities, which are operating in a supply-constrained world market. Spending to construct general-use factory space declined.

U.S. factory capacity utilization is about 80%, which is enough to generate limited new space and renovation needs but not enough to prevent a slow spending decline for several years.

The U.S. marketshare of the world “goods” market continues to shrink in spite of the boost being received from a depreciating U.S. dollar.

The value of manufacturing construction starts dropped 37% last year as U.S. GDP growth slowed and factory output declined briefly. A recovering economy has boosted starts 76% early in 2007, but this will not persist.