b'Downturn Comes for the NonresidentialHowever, make sure you are looking in the right Construction Sectormanufacturing markets.Some of our clients are reporting less profitability Nonresidential construction markets were broadly boomingassociated with facility projects in mature markets in the summer of 2024, and some folks found our forecasts(think traditional commodities). for weakness later in 2024 and in 2025 difficult to believe.We are hearing about greater opportunity in A client recalled this about our summer webinar with them:technology-related fabs. I think we were all on the same page when we came out ofIf you can find an avenue into this tech area, you will the last one. We were all thinking, These guys dont knowlikely be better insulated against the headwinds that anything about what theyre talking about.2025 will bring to the broader nonresidential construction market. They came around. Speaking of tech, data centers continue to offer Were feeling the slowdown now, the client said. Wereopportunity. Unlike other nonresidential markets, US seeing a lot of holding positions, a lot of later next years,Private Data Construction continues to accelerate in that sort of thing.growth.All seven of the key nonresidential construction marketsThe year-over-year growth rate is at a whopping we cover in the Trends Reportfrom school58.5%. construction to shopping center construction to factory constructionare on the back side of the businessThe 3/12, which compares the most recent three cycle, i.e., in either Phase C, Slowing Growth, or Phasemonths of data this year to those same three months of D, Recession.last year, is even higher, at 61.2%.Of those in Phase C, all will likely get (or are getting) at least a taste of Phase D, which we also refer to as a hard landing. Our Trends Report subscribers will know what the tough markets arewe are talking about double-digit rates of year-over-year decline. In the meantime, we thought we would share some intelligence about relative opportunitiesa treat on this classic autumn holiday. US Private Manufacturing Construction, which includes the construction of facilities that make goodsdurable, disposable, mechanical, electrical, electronic, complete, incomplete, etc.is headed for decline throughoutThe market is relatively large, at an annual $24.8 2025. However, that decline will be mild. The chartbillion as of August. shows that the market, bolstered in recent years by government spending in the tech industry andOther areas of projected mild decline: semiconductor manufacturing initiatives, should be able to withstand some decline.Decline is on the horizon for US Total Education Construction, but we do not expect the 12MMT to decline significantly past the current level. We also expect that decline in US Total Hospital Construction will be mild, with the market trending stronger than the pre-COVID norms.Timing Is EverythingOur nonresidential construction spending data is put-in-place, meaning that the spending makes it into the data as it occurs, rather than when a major contract is signed or a project is greenlit. Depending on your companys position in the economic train, that might While opportunities will be lesser next year versus this year,mean that your bookings associated with a planned they will be relatively plentiful compared to the last 20construction project will come in before the put-in-years.place spending manifests in the nonresidential (continued on page 14) 12'