WASHINGTON, D.C. — Improvement for housing from extremely low levels and broader expansion for public works are expected to push the value of construction starts in 2010 to $466.2 billion, an 11-percent increase compared with 2009, according to McGraw-Hill Construction, part of The McGraw-Hill Companies, in its 2010 Construction Outlook. This follows a 25-percent decline predicted for 2009.

“The U.S. construction market in 2010 will be helped by growth for several sectors, following three straight years of decline that brought total construction activity down 39 percent from its mid-decade peak,” said Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. “The benefits from the stimulus act will broaden in scope, lifting not just highway construction but also environmental public works and several institutional structure types. With continued improvement expected for single family housing, after reaching bottom earlier this year, the overall level of construction activity should see moderate expansion in 2010.”

Highlights of the 2010 Construction Outlook include the following:
• Single family housing for 2010 will advance 32 percent in dollars, corresponding to a 30-percent increase in the number of units to 560,000 (McGraw-Hill Construction basis).
• Multifamily housing will improve 16 percent in dollars and 14 percent in units, after steep reductions in 2008 and 2009.
• Commercial buildings will drop 4 percent in dollars, following a steep 43-percent drop in 2009. The weak employment picture will further depress occupancies, making it even more difficult to justify new construction.
• Institutional buildings will begin to stabilize after losing momentum in 2009. Square footage will retreat another 2 percent after sliding 23 percent this year. The dollar amount of construction for this sector will edge up 1 percent, helped by a growing amount of energy-efficiency upgrades to federal buildings and continued strength for military buildings.
• Manufacturing buildings will drop 14 percent in dollars and 3 percent in square feet, hampered by the substantial amount of slack manufacturing capacity.
• Public works construction is expected to rise 14 percent, given more wide-ranging strength across all project types.
• Electric utility construction will slip 3 percent, continuing to settle back after a record high in 2008.

The 2010 Construction Outlook was presented at the McGraw-Hill Construction Outlook Executive Conference in Washington, DC, which brought together top management from all parts of the construction industry including firms involved in building product manufacturing, architecture and design, contracting, engineering, industry associations, and other industry professionals. At the event, Frank Giunta of Hill International and George Pierson of Parsons Brinckerhoff offered insights to an industry emerging from the crisis:

“The stimulus funds are meant to be just that, a stimulus, not the be-all-end-all answer to infrastructure financing,” said Giunta, senior vice president and managing director of Hill International. “Both public and private sectors need to be innovative and rewrite the rules of project finance to address tremendous construction needs with minimal financing options.”

“The efforts of the federal agencies at transparency and their willingness to engage with private industry is refreshing,” said Pierson, chief operating officer, Parsons Brinckerhoff. “We have to work together to meet the challenges of infrastructure and this economy.”