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Deutsche Bank: Commercial Construction Has Peaked

Deutsche Bank: Commercial Construction Has Peaked

The strongest growth in commercial construction is behind us, according to Deutsche Bank analysts.

Construction spending is topping 90% of where it was during the last peak between 2002 and 2008, and funding is beginning to pull back—making analysts skeptical of a rebound in commercial construction during the current recovery, Business Insider reports.

On the other hand, analysts say the housing market has room to grow, along with other, more specific areas of commercial construction, like hotels and retail.

But nonresidential construction activity at large is already flat on a year-over-year basis at the same time as banks tighten lending standards. And demand for commercial real estate loans is falling, with analysts saying there are no signs of a rebound in sight. [BI]