Construction outlook mixed

According to FMI's most-recent Construction Outlook report, economic indicators are somewhat mixed. Housing, credit tightening, consumer spending and inflation continue to hinder the economy. While the general economy begins to stabilize somewhat, nonresidential construction is expected to falter late in 2008 and into 2009.

“The Fed continues cutting rates to stimulate the economy, but inflation is becoming a threat and a pause is likely,” said Heather Jones, construction economist for FMI’s Research Services.

The Construction Outlook also reports that water is an important concern in our nation. Aging infrastructure, population growth and net migration are fueling demand for new and replacement construction especially in the Sunbelt and Rustbelt regions. Water supply and sewage and waste disposal construction will increase by 2 percent and 3 percent in 2008 and by 2 percent and 4 percent in 2009 despite a decrease in state and federal revenues.

Total construction in 2008 and 2009 will be down 4 percent and 1 percent based upon large decreases in residential construction that will not be offset by gains in nonresidential and nonbuilding construction. The decline in 2009 will be driven by a decrease in nonresidential construction for the first time since 2003. Your Comment?