McGraw Hill Construction estimates construction starts at $463.1 billion, which is down 15% from 2008.
McGraw Hill Construction released its
2009 Construction Outlook Spring Update,
which provides updated 2009 forecasts of construction starts for various
The major findings of the forecast, authored by Robert
Murray, vice president of economic affairs for McGraw-Hill Construction,
starts for 2009 are estimated at $463.1 billion, down 15%, but cushioned by
support provided by the recently enacted stimulus legislation, the American
Recovery and Reinvestment Act of 2009.
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.
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.
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.
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 multifamily 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.
“The construction industry is facing divergent forces in
2009,” said Murray. “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. On the plus
side, the federal stimulus bill is now in place, which will provide quick
support to public works this year.”
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Construction Ahead: Highlights From the 2009 Spring Update
May 12, 2009