Quarterly forecast

FMI has released its latest quarterly economic forecast. Nonresidential construction will see declines in 2008 and 2009, except some publicly funded segments, according to the report. The nonresidential segments that are the most cyclical, or tied to the economy, will see declines in 2008 and 2009. These segments include office, commercial, religious and amusement and recreation. Lodging is the only exception as there is enough overhang from starts in 2007 that are still under construction in 2008.
 
Publicly funded nonresidential segments will fare much better, such as health care, educational, public safety and Homeland Security construction. Health care construction will remain positive partly due to facility upgrades across the country and seismic retrofits in California. Education construction will decline in some areas of the country due to less property taxes and therefore less state revenue. However, many MSAs and school systems in several states have passed education bonds, which will help to stop growth from turning negative.

Higher education will experience steady growth driven by an increase in endowments. Public safety construction will grow because of increasing inmate populations (which is rising faster than the general population growth) and an increase in fire and police stations. Homeland Security port and border work and port work to increase port size to be able to accept post-Panamax sized vessels will help to drive transportation construction. Increased airport delays will also increase construction. Your comment?