Supply House Times

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.


Copies of the report can be ordered at http://analyticsstore.construction.com/dodge-2012-construction-outlook.html.

Source: McGraw Hill Construction.