Construction Spending Trends Point to Systems Integration Growth

NSCA’s Winter 2014 Electronic Systems Outlook shows ‘trails of money’ that potentially lead to integrators.

Tom LeBlanc

If there are links between commercial construction trends and electronics systems investment, good news abound for the commercial integration industry, based on research provided by NSCA.

The overall construction forecast in NSCA’s Winter 2014 Electronic Systems Outlook is fairly modest with 7 percent improvement predicted in construction put in place for 2015, but it’s encouraging that, “For the first time in many years, all vertical markets are projected to show increases,” says executive director Chuck Wilson.

Construction spending isn’t necessarily related to electronic systems investment, but it’s considered a strong indicator of things to come. When analyzing integration industry trends, “I always go off of the construction industry,” Wilson has told CI. “I don’t know any better way to follow the trail of money.”

Related Webcast: Register for 5th Annual Integration Business Outlook Presented by CI & NSCA

NSCA, which works with FMI, a management consulting firm serving the construction industry, to produce its quarterly Outlook, says vertical markets in the private sector are improving faster than markets that rely on government budgets such as education. They predict biggest increases in manufacturing, corporate and hotel markets.

2015 Construction

Construction spending is climbing steadily and becoming a bigger piece of the GDP pie. Source: NSCA

Overall, however, the construction forecast is cautiously optimistic. NSCA points out that it’s more positive than it was in the previous quarterly report, but weaker areas generally remain weak and stronger areas have strengthened.

Other economic trends reflected in the NSCA report are also cautiously positive. The average consumer confidence index (CCI) has remained constant from six month ago and since 2014 it’s seen a steady upward trend, according to NSCA, adding that unemployment rates are trending downward and that construction unemployment rates nearly match those of the national rate for the first time since the 1950s.

Construction Unemployment

It’s a positive indicator that construction unemployment rates nearly match those of the national unemployment rate for the first time since the 1950s. Source: NSCA

All in all, Wilson says, “2015 looks to be a great year for the systems integration industry.”

NSCA’s Winter 2014 Electronic Systems Outlook, which provides detailed projections on each vertical market as well as four regional U.S. markets, is available free to NSCA members and to non-members for $399.

NSCA recommends using the Outlook report to benchmark sales numbers and use growth indicators to determine incentive programs.

Manufacturing Construction

One of the strongest verticals in terms of construction spending entering 2015 is manufacturing, according to NSCA, which points out that companies are increasingly relocating manufacturing facilities to America which is “on the verge of a veritable manufacturing renaissance” in its 2014 Electronic Systems Outlook.