As a rule of thumb, forecasts tend to err on the side of optimism. When a consensus forecast is flat, warning flags should go up. ENR's interviews with construction economists uncovered, at best, guarded optimism. More commonly, economists expressed degrees of pessimism, ranging from a stalled recovery that could bounce back by 2013 to a double-dip recession that could cloud numbers for the foreseeable future. But no one is too happy about 2012.
McGraw-Hill Construction's forecast for 2012 sees zero growth for construction starts following five years of depressed markets. MHC, the parent of ENR, estimates that 2011 will close out with a 4% drop, to $410 billion, in total construction starts. In 2012, starts are expected to inch up to only $412 billion, says MHC's chief economist, Robert Murray. Given the economy's current fragile condition, an overall recovery may not come until 2013 or 2014, he says. "It's going to be another year on this extended bottom. The corner is being turned, but very slowly and in an uncertain manner," Murray says.