Uncertainty over the Presidential election and concerns over solutions about the “fiscal cliff” have tamped down enthusiasm in the construction market right now, according to Robert Murray, McGraw-Hill Construction’s Vice President of Economic Affairs.
At McGraw-Hill’s 2013 Construction Forecast, held yesterday in Washington D.C.’s Ronald Reagan Building, economists gave construction execs a snapshot of an industry that’s moving slowly but surely in the right direction despite the current air of uncertainty blanketing the economy. That being said, growth is coming from increases over historic lows in many segments of the construction industry. McGraw-Hill’s benchmark 2013 Dodge Construction Outlook forecast total U.S. construction starts for 2013 will rise 6% to $483.7 billion, slightly higher than the 5% increase to $458 billion estimated for 2012.
“As reported by McGraw-Hill Construction, new construction starts in 2010 edged up 2%, followed by another 1% gain in 2011, and 2012 is headed for a 5% increase to $458 billion, said Murray. “This still leaves the volume of total construction starts 32% below the 2005 peak on a current dollar basis, and down about 50% when viewed on a constant dollar basis. “The modest gains experienced during the past two years have in effect produced an extended bottom for construction starts, in which the process of recovery is being stretched out.”
“The fiscal cliff poses a significant downside risk to the near-term prospects for the U.S. economy and the construction industry. Assuming that efforts to cushion the full extent of the fiscal cliff are successful next year, keeping the U.S. economy from sliding back into recession, then there are several positive factors to benefit construction, including low interest rates and improving market fundamentals for several project types.”
Check out next week’s issue of Electrical Marketing for full coverage of the meeting.