McGraw-Hill Construction forecasts a drop in overall U.S. construction starts for next year as the tough funding environment continues.

McGraw-Hill Construction released its “2009 Construction Outlook,” which forecasts a drop in overall U.S. construction starts for next year, as the tough funding environment continues, construction projects are deferred, and financial stress gradually eases. Against this backdrop, the level of construction starts in 2009 is expected to decline 7%, to $515 billion, following a 12% decline predicted for 2008.

According to Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction, tighter lending standards have been a major constraint for the construction industry. For single-family housing, declines continued and showed no sign of an upturn. Home prices continued to drop "