Construction market to increase 8 percent in 2011, predicts MHC VP of Economic Affairs
McGraw-Hill Construction, part of The McGraw-Hill Cos., New York, released its 2011 Construction Outlook, which predicts an increase in overall U.S. construction starts next year. The level of construction starts in 2011 is expected to advance 8 percent to $445.5 billion, following the 2 percent decline predicted for 2010, according to an Oct. 29 release.
"While the economy is still facing headwinds, the stage is being set for construction to see modest improvement in 2011 from this year's very weak activity," said Robert A. Murray, vice president of economic affairs at McGraw-Hill Construction, addressing nearly 400 construction executives and professionals at the 72nd annual Outlook 2011 Executive Conference in Washington, D.C. "We're turning the corner, slowly. 2011 will be the first year of renewed growth for overall construction activity, and 2010 becomes the final year of a very lengthy and unusual construction cycle."
Based on significant research and in-depth analysis of macro-trends, the 2011 Construction Outlook details the forecasts for each construction sector, as follows:
- Single-family housing in 2011 will climb 27 percent in dollars, corresponding to a 25 percent increase in the number of units to 565,000 (McGraw-Hill Construction basis).
- Multifamily housing will rise 24 percent in dollars and 23 percent in units, continuing to move gradually upward.
- Commercial buildings will increase 16 percent, following a three-year decline, which dropped contracting 62 percent in dollar terms. The levels of activity expected for stores, warehouses, offices and hotels in 2011 will still be quite weak by historical standards.
- The institutional building market will slip an additional 1 percent in 2011, retreating for the third straight year. The difficult fiscal climate for states and localities will continue to dampen school construction, although the healthcare facilities category should see moderate growth.
- Manufacturing buildings will increase 9 percent in dollars and 11 percent in square feet.
- Public works construction will drop 1 percent, given the fading benefits of the federal stimulus act for highway and bridge construction.
- Electric utilities will slide 10 percent, falling for the third year in a row.
In addition to Murray's Construction Outlook, industry experts delivered forecasts for green building, residential building, building product manufacturers, building materials, technology and the economy as a whole, shedding light on these crucial sectors.
"The U.S. economy is in the second year of economic expansion," said Kathleen Camilli, president of Camilli Economics. "While the growth rate is currently modest, momentum is likely to grow as the economy responds to ongoing monetary and fiscal stimulus in the pipeline. Notwithstanding the financial crisis' impact on residential and nonresidential construction, growth in this sector of the economy will continue to be driven by innovation in building technologies."
For more information on the 2011 Outlook, click here or attend a regional outlook event in Anaheim, Chicago, Dallas, Denver, Fort Myers, Minneapolis, Phoenix, Salt Lake City, Seattle, or Tampa. Murray also will present the 2011 Construction Outlook in a Webinar on Dec. 9.
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