In the NSCA’s Electronic Systems Outlook Winter 2023 report, the association for commercial integrators points out manufacturing facilities, lodging, and houses of worship as the segments that will pace growth in commercial construction for 2024.
The NSCA produces this outlook twice per year, in collaboration with FMI. The Winter 2023 report combines actual data from January through November 2023 along with forecasted information for 2024 and beyond. The association says the semiannual report “offers the newest, most relevant indicators of business opportunities for integrators.” It tracks new construction starts and renovations across multiple markets, including healthcare, lodging, corporate, education, and houses of worship—and forecasts which verticals will do well in the forecasted timeframe.
“Total U.S. engineering and construction spending is forecast to end 2023 up 10%, a slightly slower pace than the 12% in 2022,” the NSCA said when announcing the availability of the report. “For 2024, FMI forecasts a 2% increase in engineering and construction spending levels compared to 2023.”
NSCA members can download the report for free. It provides an updated view of construction data by market for electronic systems and technologies including AV, data/IT, building automation and control, life safety/fire/security, digital signage, and lighting.
“While residential construction is down, commercial construction is up,” proclaimed Tom LeBlanc, NSCA’s executive director. “The highest growth among NSCA’s targeted segments includes manufacturing, lodging, and houses of worship. Manufacturing, for example, is up 78% as compared to 2022, thanks to the Infrastructure Investment and Jobs Act, CHIPS and Science Act, and the Inflation Reduction Act. This is good news for our industry.”
In an executive summary of the Winter 2023 Outlook, the NSCA provided the following data points.
- Among all segments, including those the NSCA does and does not consider to be its targets, those enjoying the highest growth in 2023 were manufacturing, multifamily residential, lodging, sewage and waste disposal, water supply, and conservation and development
- All segments that NSCA considers its targets—education, government, healthcare, houses of worship, lodging, manufacturing, nonbuilding structures, office, other nonresidential, and retail—are expected to have ended 2023 with growth exceeding 9% over 2022 spending levels.
- FMI’s latest quarterly Nonresidential Construction Index score was 46.0 on a 1-100 scale, which is flat from the previous quarter and the seventh consecutive quarter of an under-50 score. The NSCA says this score indicates “participants remain cautious about the overall outlook for the first quarter of 2024. While there was some improvement in productivity, ongoing issues with labor and materials pricing, as well as weakening expectations across private lodging, office, and commercial segments, are likely going into 2024.”
The NSCA emphasizes that integrators “can use the Electronic Systems Outlook to benchmark sales numbers and prepare business valuations.” The association adds that some integrators use the outlook’s growth indicators to craft incentive programs, reveal market potential, and plan resources. Some integrators also use the forecast data to prove to lenders and financial advisors the stability of systems integrators in the marketplace.
Find more information about the NSCA and its semiannual Electronic Systems Outlook here.