Daryl Delano, an economist with Cahners, pointed out that the number of dollars spent on the construction of new manufacturing plants and warehouses hasn't increased in several years. "Even before adjusting for inflation, the Commerce Department estimates that total industrial construction activity declined by 3.9% in 1997 and by 3.5% last year," he reported. Spending posted only a negligible gain in 1996, after rising sharply in both 1994 and 1995.
Delano expects spending trends for industrial construction to improve very slowly.
"Our forecast anticipates another tough year for the industrial sector, although we believe that we've reached bottom and that some small spending growth is likely in 1999, followed by better - but still relatively subdued - growth during the first year of the new century."