FMI, management consultants and investment bankers to the construction industry, announced in its “Construction Outlook: Fourth Quarter 2007” that nonresidential and nonbuilding will remain strong in 2008. The Outlook also notes that FMI is not yet predicting a national recession or a downturn in nonresidential construction in 2008, although the outlook is tipped slightly downward.
The report predicts that nonresidential construction will increase again in 2008, although at a slower rate ― expanding at a 5 percent rate in 2008 and a 4 percent rate in 2009 ― as the declines in residential begin to lower demand for certain nonresidential segments.
“There are several drags on the economy, such as housing and credit tightening. However, resilient consumers, businesses and exports have so far been able to prop it up,” said Heather Jones, construction economist for FMI’s Research Services, in the report’s summary.
FMI also doesn’t expected residential construction to begin recovering until 2009. “However, FMI believes that put in place construction will realize a smaller decline than housing starts due to rising labor and material costs, upgrades and the use of higher-end materials,” the group said in a statement. “Despite large declines in total residential and single family construction, both will remain at a high level.”