The dollar value of all new construction starts declined 15% in 2008, according to McGraw-Hill Construction’s year-end tally of the market, which it estimated reached $542.83 billion last year. The entire decline can be tied to the 39% drop in the value of residential building starts. The nonresidential building market ended the year with a 1% increase, while nonbuilding construction rose 4% last year. But nonresidential building was skewed by four massive oil refineries that were started last year. If those projects were excluded, the nonresidential market would have declined by 5% last year, says Robert Murray, MHC’s chief economist.
The market is generally healthy and steadily growing, and margins are up for large specialty contractors. Further, advances in design tools and owner demand for collaboration are giving subcontractors a seat at the table early on in projects.