According to a recent report from NTEA, the U.S. construction sector performed well in 2015 and is expected to keep growing this year — good news for the work truck industry as this segment accounts for about 25% percent of all commercial vehicle sales. Spanning 28 industries as defined by the U.S. Census Bureau, the construction sector of the U.S. economy is diverse, encompassing everything from building houses and offices to constructing interstate highways and other such infrastructure as power plants and dams. Vehicles used in this market range from pickups and commercial vans to the largest Class 8 dump trucks.
Since 2012, the private segment of the construction sector has been expanding (see Figure 1). The growth rate peaked in 2014 at about 15% percent and decelerated to 10% by the first quarter of 2015, before regaining momentum. The public segment didn’t reach its cyclical trough until the beginning of 2012 and didn’t start registering positive growth until 2014. In the fourth quarter of 2015, the growth rate stabilized at about 7%.
Figure 2 reveals the primary driver of state and local government expenditures in 2015 was highway and street construction. The growth rate in this segment reached post-recession highs in 2015, with continued acceleration in the first quarter of 2016.
Continued gains in both private and public segments of construction are predicted. Housing starts usually serve as a proxy for the residential segment. In its March 2016 Outlook, the National Association for Business Economics projected housing starts will rise to 1.24 million this year — an 11.7% increase from the 1.11 million starts in 2015. Levels will likely reach 1.37 million in 2017 — 130,000 additional units, translating into a 10.5% growth rate.
Editor's note: Latin-Kasper is the market data and research director for NTEA.