FMI projects 4-percent construction reduction in 2010

RALEIGH, N.C. — According to FMI’s 2009 construction outlook report, 2010 will be the bottom in terms of dollar volume. Residential construction is expected to begin recovering in 2010. Non-building construction will continue to be a positive contributor, increasing 5 percent in 2010 as a result of conservation and development construction.

The report further details that while the economy may show some signs of improving, nonresidential construction will decline. The residential sector is expected to begin to recover in 2010. Single-family put-in-place construction will recover at a slower rate than single-family housing starts. The number of square feet per start is declining, indicating that new homes are becoming smaller and less expensive. Evident of this are the figures showing that the average and median new home sale prices are decreasing.
The report further highlights the following:

• consumer spending will not return to high levels until the employment situation improves;
• commercial construction is not expected to pick up until 2012;
• health care construction will likely see a small increase in 2010 and 2011, remaining at a historically high level;
• power construction has had four years of phenomenal growth and is expected to remain positive for the next five years; and
• conservation and development construction is one of the few surprise winners from the stimulus bill.