All Sectors Go Negative Next Year As A Real Recession Rattles Markets
The housing contagion is starting to infect healthy nonresidential-building and public-works markets. The sub-prime mortgage virus has devastated the credit markets, causing sickness in the stock market and forcing the federal government to put virtually the entire financial system on life support. Given the economic backdrop, it is hard to find a pulse in this year’s batch of construction industry forecasts for 2009.
McGraw-Hill Construction (of which ENR is part) is forecasting a 7.4% decline in construction starts in 2009, following declines of 12.4% this year and 8.0% in 2007. The U.S. Dept. of Commerce forecasts a 7.5% decline in total new construction put-in-place in 2009, following this year’s 6.3% decline. The Portland Cement Association looks for construction put-in-place to fall 13.9% next year, after adjusting for inflation. FMI Corp. anticipates a 7.4% decline in total construction work next year. The National Association of Home Builders calls for housing starts to post their fourth consecutive year of double-digit declines, with another 16.2% drop in 2009.