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McGraw-Hill Construction released its 2008 Construction Outlook yesterday, which forecasts a drop in overall U.S. construction spending for next year, fueled by tighter lending conditions and weaker job growth. Against this backdrop, the level of construction starts is expected to decline 2 percent, to $614 billion, following an 8 percent decline predicted for 2007.
“The credit crunch that emerged at mid-2007 continues to be a major concern for construction and the overall economy,” said Robert A. Murray, vice president of economic affairs at McGraw-Hill Construction. “As a result, we’re now predicting downturns in the previously resilient multifamily and commercial segments, as well as continued weakness in single-family home construction.”
There are some positives for the market in 2008, he noted. Transportation projects should continue to see moderate growth amid a renewed emphasis on infrastructure maintenance and upgrades, particularly in the aftermath of the I-35W bridge collapse in Minneapolis. Financing from public sources will stay generally supportive, and the growth of public-private partnerships also offers the potential for greater funding.
Finally, growth in “green” construction practices means that the demand for sustainable building design and materials will continue to rise.
Highlights of the report include:
The 2008 Construction Outlook is available for purchase at www.construction.com/Outlook2008/.