Construction Activity Expected To Decline 6.3% Next Year;
To Recover By 2003
Industry forecasters at CMD's 6th annual North American Construction Forecast conference delivered bad and good news: the rest of 2001 and much of 2002 will see declines in construction activity and the economy in general. But most presenters also predicted quick recovery by 2003. The event was held Oct. 16 at the National Press Club and attended by more than 300 construction industry leaders.
According to Bill Toal, chief economist for the Portland Cement Association, the U.S. construction industry can expect an overall decline of 6.3 % in activity next year due to the economic downturn. Still, "by historical contrast this would put construction spending back to slightly above 1998 levels, which were record levels of activity," he said.
"We expect a 10% decline in private, non-residential construction spending next year after a 5.4% drop this year," Toal said. On the residential side, increased unemployment and stock market volatility will hit the consumer causing home sales to decline by 8.5% next year after increasing by 1.2% this year.
David Seiders, chief economist for the National Association of Home Builders (NAHB), agreed that the residential market has been hurt and will continue to suffer in the immediate future. He pointed out that industry sales are now about the same as the mid 1990s, which is "not that bad . . . baby talk when compared to the 1980s and early 1990s."
Toal and Seiders said it won't take long for the construction industry to recover. Toal predicts the construction industry overall will see a 4.2% increase by 2003 and Seiders forecasts recovery for residential markets to begin as early as the first quarter of 2002.
For more detailed construction forecast information from these speakers, visit www.nacf.com.