McGraw-Hill Construction provides forecasts for 2009McGraw-Hill Construction, a division of the McGraw-Hill Cos., New York, has released its 2009 Construction Outlook Spring Update, which offers updated 2009 forecasts of construction starts.
The forecast estimates new construction starts at $463.1 billion, which is down 15 percent from 2008 but is cushioned by support from the economic stimulus package. It also expects institutional building to drop 6 percent as the struggling economy affects educational and health care facilities.
The report predicts commercial building will fall 27 percent compared with the 17 percent reported in 2008 because tight lending has led to a halt in projects. All commercial building types are expected to decline in 2009, hitting hotel construction most severely. Residential building is estimated to drop 31 percent, with single-family housing falling 30 percent and multifamily housing falling 31 percent. However, measures taken to address the foreclosure problem in 2009 should help ease housing's rate of decline.
"The construction industry is facing divergent forces in 2009," says Robert Murray, vice president of economic affairs for McGraw-Hill Construction. "The economy has weakened substantially, and despite all the efforts last fall directed at thawing frozen credit markets, there's yet to be any sign that lending conditions for construction have improved. On the plus side, the federal stimulus bill is now in place, which will provide quick support to public works this year."
Public works are expected to benefit most efficiently from the economic stimulus package, with construction starts increasing 10 percent, including a 15 percent increase for highways and bridges. Without the economic stimulus funds, public works would have been expected to decline 10 percent.
Date : 4/16/2009