Construction market to increase in 2010

Article Tools

• Bookmark

Advertisement

Most Popular News

• Where teleworking is headed in 2012
• Increased use of purchasing cards in government likely in 2012
• Affordable kiosks ensure ADA compliance in government facilities

Know before you buy or sell. Get your truck's value instantly online.

Find Your Truck Now

*To see the actual values, you must purchase a subscription or a single-vehicle lookup.

An optimistic outlook for the construction sector stems from an improvement in housing starts from extremely low levels and broader expansion for public works. The level of construction starts in 2010 is expected to climb 11 percent to $466.2 billion, following the 25 percent decline predicted for 2009, according to McGraw-Hill Construction, New York.

"The U.S. construction market in 2010 will be helped by growth for several sectors, following three straight years of decline that brought total construction activity down 39 percent from its mid-decade peak," says Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. "The benefits from the stimulus act will broaden in scope, lifting not just highway construction but also environmental public works and several institutional structure types."

Highlights of the 2010 Construction Outlook from McGraw-Hill Construction include:

• Public works construction is expected to rise 14 percent, given more wide-ranging strength across all project types.
• Single-family housing next year will advance 32 percent in dollars and 30 percent in number of units.
• Multi-family housing will improve 16 percent in dollars and 14 percent in units, after steep reduction in 2008 and 2009.
• Commercial buildings will drop 4 percent in dollars, following a steep 43 percent drop in 2009. Weak employment will further depress occupancies.
• Institutional buildings will begin to stabilize after losing momentum in 2009. Square footage will retreat another 2 percent (after sliding 23 percent in 2009). The dollar amount of construction will edge up 1 percent.
• Manufacturing buildings will drop 14 percent in dollars and 3 percent in square feet, reflecting slack manufacturing capacity.
• Electric utility construction will slip 3 percent, further settling from a record high in 2008.

"The stimulus funds are meant to be just that, not the be-all-end-all answer to infrastructure financing," says Frank J. Giunta, senior vice president and managing director of Hill International, a construction consulting firm. "Both public and private sectors need to be innovative and rewrite the rules of project finance to address tremendous construction needs with minimal financing options."

A less optimistic view of the outlook for construction comes from FMI's Construction Outlook, which forecasts total construction will be down 13 percent in 2009 and 7 percent in 2010. FMI, a management consulting firm, expects residential construction to decline 1 percent in 2010 and nonresidential construction to decline 14 percent. Non-building construction will be the bright spot, increasing 4 percent in 2009 and again in 2010. "The economy may show some signs of improvement, but it is just the beginning of the downfall for nonresidential construction," says Heather Jones, a construction economist for FMI's Research Services Group.

About the author

Larry Anderson is the editor of Go Pro.