CHICAGO—According to a new 2014 Outlook research report from Fitch Ratings, the US building materials industry should have a good 2014. The agency projects that total construction spending will increase 9.2% during the next year. The projected boost would be nearly double the projected 4.9% increase during 2013. The main driver will be a continuing strength in new residential construction.

Furthermore, according to Director Robert G. Rulla, “home remodeling spending stands to grow modestly next year as housing turnover improves. The same holds true for commercial construction spending, while public construction spending should increase only slightly.”

But even with these healthy increases, spending on new residential construction will remain below historical averages. “From 1993 to 2012, spending on new residential construction accounted for about 30% of total construction spending,” the researchers note. “From 2009 to 2012, spending on this sector represented only 16% of the total. Fitch projects new residential construction spending will increase to about 21% of total spending in 2013 and 25% during 2014.”

Fitch expects new single-family housing starts in 2013 will hit 615,000, a growth rate of 15.0%, while multifamily starts will grow about 20% to 295,000. And despite the higher interest rates expected some time next year, relatively solid economic and jobs growth should push single-family housing starts in 2014 to 738,000 and multifamily starts to 322,000, or over 1 million total. “New home price inflation should moderate next year, at least partially because of higher interest rates,” the report says. “Average and median new home prices should rise about 3.5% in 2014.”