The economic forecasts for 2011 construction activity are starting to pop up, and it seems a little bit like "deja vu all over again," or the movie Groundhog Day -- take your pick.
Maybe it's just me, but it seems like at least some economists are sort of singing the same tune they did a year ago. I mean, wasn't it a year ago that we were reading about a big jump in residential construction leading the industry out of the dumps and (eventually) back to the promised land?
A recent ENR synopsis of industry forecasts from McGraw-Hill Construction and other groups, reminds us how 2010 wasn't what it was supposed to be.
"A year ago, economists were predicting 30% increases in the housing market, but that turned into a mere 6% gain, not enough to carry a recovery, especially with the non-residential market posting double-digit declines and massive federal stimulus funding managing to boost public works by only 2%, according to McGraw-Hill Construction’s estimates for 2010."
(For more on the 2011 Outlook, check out this brief video summarizing some highlights.)
Here comes the deja vu part, according to ENR's summary: "Most of next year’s increase will come from a predicted 27% increase in single-family housing."
Well, from my vantage point in Florida, with foreclosures still on overdrive, and housing still remarkably overbuilt, I'm guessing this rejuvenated single-family market will be located in another part of the country. That said, the positives for 2011 are arguably broader than they were a year ago, according to the ENR report.
"MHC believes that market fundamentals will lead to some solid rebounds, including a 13% increase in office building work, which declined 23% this year. Other big turnarounds are a projected 13% increase in hotel and motel work, after falling 31% this year; a 25% increase in commercial building, following a 10% decline in 2009; and a 14% increase in stores and shopping centers, following a 7% decline this year."
Overall, ENR's report continues, "MHC is forecasting the dollar value of total U.S. construction starts in 2011 will increase 8% to $445.5 billion, following an estimated 2% decline this year and an actual 24% drop in 2009."
Of course, even if these numbers hold up, nobody should be breaking into "Happy Days are Here Again," says Robert Murray, MHC's chief economist.
“It’s easy to get double-digit increases off of such low numbers. In volume terms, some of these markets are simply moving up from their worst year to their second-worst year we have seen since 1960,” Murray says.
So - What do you think 2011 will bring to the Southeast's construction industry? To express your opinion statistically, try this quick, one-click poll of ours that asks this simple question: "What is your prediction for 2011 construction activity in your local region?"
Another option is to go ahead and comment below. What market sectors do you think will be the most active? What are the prospects for your firm's local market? Just share your thoughts below through the Comment function. And, if possible, please include a name and city at the bottom of your comment - even if it's just your first name or initials. Thanks!
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