New construction starts for 2008 are estimated at $558.5 billion, down 11 percent from 2007, according to McGraw-Hill Construction’s annual Construction Outlook Midyear Update. Single-family housing continues to weaken, with 2008 declines of 28 percent in dollar volume and 31 percent in dwelling units, steeper than what occurred in 2007. The single-family market is being adversely affected by falling home prices, mounting inventories and tight lending conditions.
The commercial building that expanded in 2006, 2007 and into the first quarter
of 2008 is losing momentum. The slower economy and tighter lending conditions
are now causing projects to be deferred. For 2008, commercial building will
retreat 8 percent in dollar volume and 16 percent in square feet. Stores and
warehouses are the most vulnerable to decline in the near term, while lesser
reductions are anticipated for hotels and office buildings.
Institutional construction in 2008 continues to see strong educational
building, helped in particular by more expansion for colleges and universities.
The 2008 forecast for institutional facilities calls for a 2 percent gain in
dollar volume, although square footage will settle back 3 percent.