Public-sector spending growth jumped in November to 11.8% year over year, compared with 10.7% the month before, UBS says. While year-to-year private spending declined in November for the seventh straight month, says Fisher, the drop moderated to 0.6% from the October 2.8% falloff rate.

But the UBS analysis predicts that for all of 2019, non-residential spending will only grow 2%, compared with 5.6% year over year in 2018, and will decline 0.7% in 2020, driven by weaker private sector spending, except in power.

Andrew Wittmann, engineering and construction sector analyst for Baird, noted in a Jan. 7 investor report that, in 2020, he expects “end market fundamentals [to be] still generally positive, particularly in steadier infrastructure and government markets.” He predicts some impacts from general economic trends as well as this year’s elections, but expects most firms to grow.

He says that most markets “remain in an upward trajectory with consolidated E&C sector backlog expanding for nearly two consecutive years.” According to Wittmann, strong corporate tax benefits “should offer continued infrastructure/environmental investment support, with oil & gas trends likely to hold stable.”

Related to construction risk, Wittmann says that E&C companies “are better addressing risk, with those finding greater success being rewarded by investors.” He says, “Contractors are starting to shift risk back toward sponsors, which should be a healthy development broadly.” Wittman says improved balance sheets could propel “modestly” better cash flow in 2020 that could somewhat boost stock buybacks and merger and acquisition activity.