The housing market has fallen to such a low level that even the two years of double-digit growth—for 2012 and 2013—predicted by the National Association of Home Builders would still leave the market well below where it should be, says NAHB's economist, Robert Denk. NAHB thinks the demographics and fundamentals of the housing market call for 1.4 million housing starts a year, but the market has been stuck in the 400,000-unit range since 2009. NAHB predicts single-family housing starts will increase 17%, to 495,000 units, in 2012, and increase another 46%, to 723,000 units, in 2013. But these large percentage
With federal stimulus spending running out, the U.S. Congress in budget gridlock, and state and local governments cutting back on spending, public construction is expected to be the weakest sector in 2012. McGraw-Hill Construction forecasts public-works starts will decline another 5% next year, following a 16% drop in 2011 and a 4% dip in 2010. Likewise, institutional-building starts will decline 2% next year, after falling 15% in 2011, 2% in 2010 and 14% in 2009.
The federal government has conducted stress tests of financial institutions after lending billions of dollars in the Temporary Assistance Recovery Program (TARP). The main aim of the tests is to determine if banks can survive the economic downturn without additional capital. The idea is to avoid a repeat of the financial crisis that occurred last year when Lehman Brothers, Bear Stearns and other lenders went bust as a result of miscalculating their risk. What is the impact from misjudging risk on the design and building industry? During a slow economy claims and litigation increase. The economic climate also is forcing