Fitch Ratings has just released its annual outlook report for the US building materials industry and projects strong growth in overall construction spending during 2015. The private sector should be particularly strong and help boost construction spending by 7%. “Public construction spending remains constrained and is expected to increase only slightly next year,” Fitch researchers say.
In addition, Fitch expects revenue growth to average 8% to 10% for building materials companies in 2015, driven by organic growth as well as acquisitions completed this year. Coupled with the sector’s projected growth in margins and slightly lower debt levels, this should lead to modest improvement in credit metrics, the researchers add.
“The modest recovery in the US construction market and our expectation of a moderate improvement in credit metrics are generally factored into the current ratings and outlooks,” says Robert Rulla, a director at Fitch.
The report bolsters other good economic news that recently came to light. The most November jobs report, for example, showed tremendous gains in the labor market and a strengthening of economic fundamentals. Furthermore, as reported in GlobeSt.com, experts also expect that the US cement market will grow 8.2% in 2014, followed by similar rates of growth in 2015 and 2016.
