Despite noting that “the long-awaited recovery seems to be under way,”a newly released Consensus Construction Forecast offers little reason for optimism in 2010. It does, however, provide hope for 2011.
The semi-annual report—compiled from data provided by McGraw-Hill Construction, Global Insight, Portland Cement Association, MoodysEconomy.com, and other sources—predicts that nonresidential construction activity will fall another 13.4 percent in inflation-adjusted dollars this year, which is notably better than the 20 percent drop-off in 2009. In the report, nonresidential construction refers to the commercial, industrial, and institutional sectors.
Commercial and industrial are projected to be weaker this year than in 2009, with declines of about 20 percent. Office construction spending will dip 18.6 percent, and hotel construction spending will plummet 23.5 percent, according to the study.
On a brighter note, the report anticipates advances in 2011. Nonresidential construction activity is expected to rise 1.8 percent, with the commercial sector to increase 8.9 percent, led by a 11.8 percent hike in office construction spending. However, industrial will still lag; after an anticipated drop of 24.3 percent this year, the industrial sector will fall another 7.8 percent in 2011, according to the report.