Commercial construction may see declines
According to The Wall Street Journal, the construction industry is preparing for significant reductions in commercial and public works projects, which could result in the industry's deepest, longest contraction in recent years.
A report released in late October 2008 by New York-based McGraw-Hill Construction Cos. Inc. estimates new construction projects' values will have dropped to $515 billion by the end of 2008, which is a 7 percent decrease from 2007 and 25 percent less than its $690 billion peak in 2006.
Hotel, office building, warehouse and factory construction—which has remained relatively strong in recent years—is expected to decline. In states with low tax revenues, financing for commercial projects has become too expensive or difficult to secure. Although most construction downturns last one or two years, the current construction downturn will be in its third year for all property types and fourth year for single-family homes, according to the McGraw-Hill Construction report.