Construction spending lower for 2009

Commerical construction continues to struggle.
Commerical construction continues to struggle.
Consumers could expect to see less construction equipment at work in the coming months, according to a new report.

The IHS Global Insight's Construction Service noted in its Third Quarter U.S. Construction Briefing that commercial construction spending is continuing to see hard times. Commercial construction has seen an annual decline of 27.9 percent.

"The combination of shrinking revenue and tight credit markets is acting as a roadblock to businesses seeking additional financing," IHS noted.

Though commercial construction is on a downturn, the group expects residential construction to climb by 4.8 percent during the fourth quarter of 2009. According to recent numbers from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, the number of housing starts saw a 1.5 percent increase in August, though single-family housing starts dropped by 3 percent.

On the whole IHS expects construction spending on an annual basis to drop by 12 percent during 2009. Next year, the group expects spending on construction to drop by 4 percent. Despite a predicted gain in residential construction, the lack of commercial construction is bringing overall numbers down.

However, the group noted that real construction is expected to bounce back with double-digit growth in 2011 and 2012.