FMI 2022 construction spending forecast: 7% growth despite economic turmoil

Entering the second quarter of 2022, FMI expects construction spending to end 2022 up 7% compared to up 8% in 2021. But that growth will be offset by inflation, supply chain snarls, a shortage of workers, project delays and economic turmoil caused by international events such as the Russia-Ukraine war, according to FMI's 2022 North American Engineering and Construction Outlook Second Quarter Edition.

Key highlights of the report include:

Strong investment in residential and manufacturing will drive industry spending through 2022.
Due to expected increases in infrastructure funding later this year, several nonbuilding segments, including highway and street, sewage and waste disposal and water supply, are all anticipated to realize growth rates of more than 5% in 2022.
Year-end 2022 growth will be tempered by ongoing spending declines across various nonresidential building segments, including lodging, office, educational, religious, public safety and amusement and recreation.
Commercial, health care, communication, power and conservation and development are all expected to end the year with low growth, roughly in line with the historical rate of inflation, between 0% and 4%, and are therefore considered stable.

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Inflation may be starting to show some signs of cooling, but the Fed isn’t backing down anytime soon and the impact is becoming more noticeable in the architecture, engineering, and construction (A/E/C) space. The overall A/E/C outlook continues a downward trend and this is driven largely by the freefall happening in key private-sector markets.

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