The2009 Construction Outlook Spring Updatefrom McGraw-Hill Construction, part of The McGraw-Hill Companies, reported that this year’s new construction starts are estimated at $463.1 billion, down 15%, but cushioned by the recent American Recovery and Reinvestment Act of 2009.
The updated forecast also found:
- Public
works will see the most immediate benefit from the stimulus act, with
construction starts climbing 10%, including a 15% rise for highways and
bridges. Without the stimulus funding, it is estimated that public works in
2009 would have fallen 10%, restrained by the deteriorating fiscal health of
state and local governments.
- Institutional
building in 2009 will retreat 6%, as the weak financial environment takes its
toll on educational and healthcare facilities. The stimulus funding will
provide a lift to military facilities and energy upgrades for federal
buildings, which will moderate this year’s overall institutional decline.
- Commercial
building in 2009 will drop 27%, steeper than the 17% slide reported last year.
The tight lending environment has made it extremely difficult to obtain project
financing, leading to more projects being deferred or cancelled. All commercial
project types will register declines in 2009, with the most severe retrenchment
anticipated for hotel construction.
- Residential building in 2009 will drop an additional 31%, continuing the downward trend that’s been underway since 2006. Similar declines are expected for single-family housing (down 30%) and multi-family housing (down 31%). Steps taken in early 2009 to address the foreclosure problem should help to ease the rate of descent for housing as 2009 progresses.
Source: McGraw-Hill Construction
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