Gains in housing and public works will offset declines in commercial and manufacturing building, according to the 2010 Construction Outlook, which McGraw-Hill Construction released at its Construction Outlook Executive Conference in Washington, DC, on October 16, 2009.
According to the report, improvement for housing from extremely low levels and broader expansion for public works are expected to raise the level of construction starts in 2010 by 11%, to $466.2 billion, following the 25% decline predicted for 2009.
“The U.S. construction market in 2010 will be helped by growth for several sectors, following three straight years of decline that brought total construction activity down 39% from its mid-decade peak,” said Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. “The benefits from the stimulus act will broaden in scope, lifting not just highway construction but also environmental public works and several institutional structure types. With continued improvement expected for single family housing, after reaching bottom earlier this year, the overall level of construction activity should see moderate expansion in 2010.”
Highlights of the 2010 Construction Outlook include the following.
• Single family housing for 2010 will advance 32% in dollars, corresponding to a 30% increase in the number of units to 560,000 (McGraw-Hill Construction basis).
• Multifamily housing will improve 16% in dollars and 14% in units, after steep reductions in 2008 and 2009.
• Commercial buildings will drop 4% in dollars, following a 43% drop in 2009. The weak employment picture will further depress occupancies, making it even more difficult to justify new construction.
• Institutional building construction will begin to stabilize after losing momentum in 2009. Square footage will retreat another 2% after sliding 23% this year. The dollar amount of construction for this sector will edge up 1%, helped by a growing amount of energy-efficiency upgrades to federal buildings and continued strength for military buildings.
• Manufacturing building construction will drop 14% in dollars and 3% in square feet, hampered by the substantial amount of slack manufacturing capacity.
• Public works construction is expected to rise 14%, given more wide-ranging strength across all project types.
• Electric utility construction will slip 3%, continuing to settle back after a record high in 2008.
Mc Graw-Hill said that its 2010 Construction Conference brought together top management from all parts of the construction industry, including firms involved in building product manufacturing, architecture and design, contracting, engineering, industry associations, and other industry professionals. At the event, Frank Giunta of Hill International and George Pierson of Parsons Brinckerhoff offered insights to an industry emerging from the economic crisis:
“The stimulus funds are meant to be just that, a stimulus, not the be-all-end-all answer to infrastructure financing,” said Frank J. Giunta, senior vice president and managing director of Hill International. “Both public and private sectors need to be innovative and rewrite the rules of project finance to address tremendous construction needs with minimal financing options.”
“The efforts of the federal agencies at transparency and their willingness to engage with private industry is refreshing,” said George J. Pierson, chief operating officer, Parsons Brinckerhoff. “We have to work together to meet the challenges of infrastructure and this economy.”
For more information on the McGraw-Hill 2010 Outlook, visit http://construction.ecnext.com/coms2/summary_0249-323417_ITM_analytics?referid=10124.
McGraw-Hill Construction, part of The McGraw Hill Companies, provides construction project information, plans and specifications, product information, industry news, and industry trends as well as forecasts for the North American market.