Posted on 07/21/2010 7:39:01 AM PDT by Lurker
The American Institute of Architects’ midyear look at nonresidential construction concludes that new development spending likely to fall more than 20% this year -- significantly more than forecasters predicted six months ago -- with hotel and office construction down by more than 43% and 29%, respectively.
Even with a modest U.S. economic recovery under way, overall nonresidential spending is expected to drop 20.3% for 2010 - nearly 30% for private commercial development -- before edging up an inflation-adjusted 3.1% in 2011, according to the AIA’s semi-annual Consensus Construction Forecast, a survey of the nation’s leading construction forecasters. Manufacturing facilities will see a 20% decline, and even government and other institutional buildings will likely fall 12%.
The AIA’s consensus forecast panel was downbeat at the beginning of the year, projecting a 13.4% decline in construction spending for nonresidential projects. However, prospects are even worse at the halfway point.
"Our construction forecast panel expects the weakness in the construction sector to continue well into 2011," said AIA Chief Economist Kermit Baker.
Most nonresidential construction building categories are weighed down by some degree of oversupply, combined with weak demand, declines in commercial property values, difficulty getting projects financed and macroeconomic factors. Those combined factors have contributing to what Baker describes as "one of the steepest construction downturns in generations."
"We have businesses nervous about expanding their facilities, a fragile financial sector, excess commercial space, and general unease in the international economy," Baker said.
Not likely to affect many American workers judging by this Abington, PA worksite video made last month.
http://www.youtube.com/watch?v=iQ65ftaliBM
Well, it was not only predictable but mathematically verifiable, at least in the major case where stimulus (porkulus) construction spending ends. One should be able to prepublish the drop months or a year ahead. Temporary propping up unions, state bureacracies, and other big gov constituencies has to have a payback when the flow stops. And this approach to “governing” has a payback when we run out of other people’s money.
FYI
Many empty houses around here...no need to build any more.
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