The construction market may take a slight dip in 2008 due to a downturn in nonresidential construction, according to FMI.
The management consultants and investment bankers to
the building and construction industries recently announced its outlook for the
second quarter of 2008.
It indicates that construction
levels for 2008 remain much the same, but the outlook for 2009 has been revised
downward because a drop in nonresidential construction usually comes after a slowdown
in the general economy.
Recently released economic indicators are somewhat mixed. Housing, credit
tightening, consumer spending and inflation continue to hinder the U.S.
economy. While the general economy is expected to begin to stabilize somewhat,
nonresidential construction is expected to falter late in 2008 and into
“The Fed (Federal Reserve Board) continues cutting
rates to stimulate the economy, but inflation is becoming a threat and a pause
is likely,” said Heather Jones, construction economist for FMI’s Research
Total construction will be down 4 percent in 2008
and 1 percent in 2009, based upon large decreases in residential construction
that will not be offset by gains in nonresidential and nonbuilding
construction, FMI predicted. The decline in 2009 will be driven by a decrease
in nonresidential construction for the first time since 2003.
information in FMI’s forecast is based on building permits and construction
data provided by the U.S. Commerce Department.
Construction outlook mixed, says FMI
September 1, 2008