Forecasters are predicting that new construction will decline steeply in commercial and residential markets this year, although funding from the federal stimulus package should boost construction of public infrastructure.
The spring update to the 2009 construction outlook issued by McGraw-Hill Construction predicts that new construction starts for 2009 will decline by 15 percent this year to $463.1 billion, discouraging news for contractors and other related industries such as construction equipment.
"The construction industry is facing divergent forces in 2009," said Robert Murray, vice president of economic affairs for McGraw-Hill Construction and author of the report.
"The economy has weakened substantially and, despite all the efforts last fall directed at thawing frozen credit markets, there's yet to be any sign that lending conditions for construction have improved," Murray added. "On the plus side, the federal stimulus bill is now in place, which will provide quick support to public works this year."
On the downside, commercial building in 2009 will drop 27 percent, as compared to a 17 percent decline last year. Residential building in 2009 will drop an additional 31 percent, continuing the downward trend underway since 2006, Murray reported.
Institutional building in 2009 will drop 6 percent, as the weak financial environment takes its toll on educational and healthcare facilities.