Housing, Commercial Building Starts May Improve Slightly In 2012
October 27, 2011
However, overall U.S. construction starts for next
year will remain essentially flat, according to McGraw-Hill Construction’s 2012 Dodge
Construction Outlook.
Overall U.S.
construction starts for next year will remain essentially flat, according to
the recently released McGraw-Hill Construction’s 2012 Dodge Construction
Outlook. The level of construction starts in 2012 is expected to be $412
billion, the report says, following the 4 percent decline to $410 billion
predicted for 2011.
However, the report estimates that
single-family housing will improve 10 percent in dollars next year, corresponding
to a 7 percent increase in the number of units to 435,000 (McGraw-Hill
Construction Dodge basis). This is still a low amount, as the excess supply of
homes due to foreclosures continues to depress the market.
Commercial building is expected to grow
8 percent. Warehouses and hotels will see the largest percentage increases, the
report notes, but improvement for offices and stores will be modest.
“The backdrop for the construction
industry is the fragile U.S. economy, which continues to see slow employment
growth, diminished funding from federal and state governments, and pervasive
uncertainty,” said Robert Murray, vice president
of economic affairs, McGraw-Hill Construction. “In 2012, the top-line numbers
are not expected to show much change, but there will be variation within the
major construction sectors … assuming the U.S. economy avoids recession.”
Watch a video about the forecast below:
Additional details found in the 2012
Dodge Construction Outlook include:
Multifamily housing
will rise 18 percent in dollars and 17 percent in units, continuing its moderate,
upward trend.
The institutional building
market will slip an additional 2 percent in 2012, after falling 15 percent in
2011. The tough fiscal environment for states and localities will continue to
dampen school construction, and the uncertain economic environment will limit
growth in health-care facilities.
Manufacturing buildings will
increase 4 percent, following the 35 percent gain in 2011, as the low value of
the U.S. dollar continues to support export growth.
Public works construction
will drop a further 5 percent, after a 16 percent decline in 2011, due to
spending cuts and the absence of a multiyear federal transportation bill for
highway and bridge construction.
Electric utilities will
retreat 24 percent, following a 48 percent jump in 2011.
