RALEIGH, N.C. (Jan. 26, 2023) — FMI Corporation, a provider of consulting and investment banking services to the built environment, released the 2023 North American Engineering and Construction Industry Overview. The report provides a comprehensive forecast for a broad range of construction and engineering segments in the U.S. and Canada.

Entering 2023, FMI expects construction spending to decline 2% compared to 2022, mostly due to a decline in residential construction. We continue to see near-record inflation, supply chains still face disruptions across global markets, and companies continue to struggle to find the talent needed to execute new and existing projects.

“Given this uneven landscape, it is critical to understand your core competencies, markets and clients to compete in 2023,” wrote FMI CEO Chris Daum in the introduction to the report. “Knowing your opportunities and challenges and having a plan for tackling them will help your company continue to be successful. Furthermore, firms that focus on their people and culture and execute a clear strategy will be more likely to weather the upcoming downturn.”

In addition to FMI’s segment commentary, key highlights of the report include:


  • Total engineering and construction spending for the U.S. is forecast to end 2022 up 8%, the same increases as in 2020 and 2021, all led primarily by residential construction.
  • High-growth segments in 2022 are expected to include multifamily, residential improvements, commercial, manufacturing, sewage and waste disposal, water supply, and conservation and development construction, each with annual growth rates exceeding 10%.
  • A limited number of segments are expected to end the year with growth rates between 0% and 4%, or roughly in line with historical rates of inflation. These segments include lodging, office, educational, transportation and communication.
  • Only the religious, public safety and power segments are expected to decline in 2022. Real losses in output (e.g., square footage, installed capacity, etc.) are projected to be significant, especially in power.
  • The latest Nonresidential Construction Index (NRCI) score of 46.4, nearly flat from the previous quarter’s score of 46.3, suggests ongoing concerns heading into the first quarter of 2023. The index has remained under 50 for three quarters and indicates fewer future engineering and construction opportunities into 2023.


Download the full 2023 overview here.