The construction industry is not recovering as quickly as expected, says Robert A. Murray, McGraw-Hill Construction's vice president of economic affairs. Total construction starts in 2011 are forecast to reach $413 billion, a 3% decline from 2010, Murray says in an update of MHC's mid-year outlook. Expectations were higher for this year as starts had leveled off last year after plunging 24% in 2009.
First-half 2011 starts have "bounced along the bottom," providing little evidence that the industry is heading toward sustained growth, Murray says. He cites a weak single-family housing market and a steep decline in public works.
There are several bright spots, however. The commercial buildings sector is beginning to show upward momentum, he says. New commercial starts are expected to climb 10% in dollar terms in 2011, following a three-year period in which starts dropped 60%.
Other sectors expected to improve include manufacturing buildings with a 37% jump forecast; electric utilities, up 28%; multifamily housing,16%; and commercial buildings, up 10% in dollar terms.