Construction Market Forecast: The general economy is seeing mixed signs
Raleigh, N.C., October 26, 2010 – FMI, the largest provider of management consulting and investment banking to the engineering and construction industry, releases the Construction Outlook: Third Quarter 2010 Report.
Although some areas of the general economy have been seeing slight improvements, the construction industry is still struggling to gain traction. According to our 3rd quarter forecast, “The construction industry should prepare for another year of decline in nonresidential construction.” We do not expect the sharp drop we have seen in the past two years, but most markets will have either modest gains or modest declines in 2011. The exceptions include transportation and power construction still buoyed by government spending and the need to comply with new regulations. Sewage and waste disposal and conservation construction have also been positive contributors to total construction put in place, but the markets are too small to lift the overall totals very much.
Report highlights include:
- Total construction in 2010 will be down 7% after declining 15% in 2009.
- Residential construction is expected to begin to recover in 2010. However, the expiration of the federal home buyer tax credit poses risk to the recovery of the sector.
- The nonresidential sector will see a double-digit decline in 2010. Transportation construction will be the only segment likely to see actual growth.
- Sewage and waste disposal, and conservation and development construction will contribute to a positive climb in the nonbuilding segment.
- There have been losses in 34 out of 37 consecutive months, bringing the construction unemployment rate to 15.9%.
FMI’s Research Services Group is responsible for design, management and performance of primary and secondary market research projects and related research activities, including economic analysis and modeling, construction market forecasting and database management.
Download FMI’s Construction Outlook: Third Quarter 2010.