Well, not everyone is still nesting with the folks. Many have opted to rent, and that trend has been driving the apartment market. Through the down market, multifamily housing has continued to improve. Starts for this market are expected to rise 13%, to $23.6 billion, this year—the second consecutive year of double-digit growth, according to McGraw-Hill Construction. Next year, this sector is forecast to increase another 18%, with spending to reach $28 billion. "This is the one real bright spot for the building sectors," says Murray.

The main reason there are not more bright spots is public financing—it is not there on the federal level. It is not there on the state level. It is not there on the city level. It just isn't there, period.

This lack is significant because the previous five-year downturn in construction activity was preceded by more than a decade of historic growth.

However, that long expansion was interspersed with many mini-cycles in the private non-residential building market and even in some public-works markets. But they were always corrected by either a pump of air into the housing bubble or, more often than not, a pump of financing from public works, primarily highways and institutional building. This time around, both pumps are not working.

Federal stimulus spending has come under heavy criticism from some political pundits, but it may very well end up being a "you will miss me when I'm gone" phenomenon—and next year it will be gone. In the short and medium term, this austerity turn will hurt the construction recovery. As the economist John Maynard Keynes said, "In the long run, we are all dead."

"It is not talked about a lot, but we are still seeing a positive impact from [federal] stimulus spending this year. But that largely disappears in 2012," says PCA's Sullivan. "Add to that the lingering fiscal crisis facing most states and you have the potential of a steep slide in public spending next year," he says.

"It took some time for the stimulus to show up in real construction, and I'm not talking about filling potholes. So even if [Congress] passed a new stimulus or jobs package tomorrow, it would not show up in 2012," Sullivan adds. "I'm not trying to split hairs. We are riding on the bottom again next year, and the market I am most concerned about is the public sector."

McGraw-Hill Construction's regional forecast reveals widespread weak public spending for construction in 2012. The biggest drag on construction will come from the public sector, says Murray, including year-to-year declines in non-building work of 7% in the Northeast, 6% in the Midwest, 13% in the South Central region and 23% for the western states. The only hike Murray sees is a 9% increase in non-building work in the South Atlantic region (see map).

Likewise, Murray sees declines in public institutional building markets of 6% in the Northeast, 4% in the Midwest and 2% in the South Atlantic region. He predicts increases of 1% for institutional building work in the South Central region and a 3% increase in the west.

"The lift provided to construction from the federal stimulus act has fallen considerably," says Murray. The MHC database shows that public-works and electric-utility projects tagged as "stimlus-related" jumped from $200 million in the first quarter of 2009 to $8.5 billion in the third quarter of 2009.