Information-technology firms and construction-related companies dominate the fastest-growing industries in the U.S., according to new data from Sageworks, a financial information company.
Seven of the top 10 industries with the highest sales growth rates are related to construction, which is another area of the economy that has been showing strength in recent years. Among construction-related industries with the fastest sales growth: building finishing contractors, residential and nonresidential builders, contractors that work on foundations and building exteriors, and contractors that install or service mechanical systems such as electricity, water, elevators and heating and cooling. Each of these industries experienced sales growth last year of at least 13%. Companies that provide civil engineering construction such as dredging also made the list, while highway and bridge construction companies narrowly missed the top 10.
Construction spending in February was at a seasonally adjusted rate of $1.19 billion, or 3% above the year-ago rate and on pace to notch the sixth year in a row of increased construction spending, according to U.S. Census Bureau data. Other government data also show an increase in employment of workers in the construction sector, as well as average hours worked and earnings, Noe pointed out. “That, coupled with the fact that we have all of these subindustries in the construction sector in our top 10 list is just a testament to how the construction industry has recovered from the recession in 2008 and 2009,” Noe said.
And while construction strength was concentrated in specific sectors earlier in the economic recovery, growth is currently spread across nearly all sub-industries in construction that are tracked by Sageworks, he added.
Are these industries nearing a peak? “'I don't know' is the answer, but right now, given these upward trends of the construction industry, it bodes well for that industry and the economy as a whole,” Noe said.
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