Forecast is for weak activity, with bright spots

U.S. residential and non-residential construction activity is expected to remain weak through most of the coming year, according to the 2009 Wells Fargo Construction Industry Forecast. Survey respondents were slightly less pessimistic about non-residential construction activity.

Many survey respondents expect comparable levels of construction activity in the non-residential and residential sectors. However, 43 percent of contractors and 39 percent of construction equipment distributors foresee less non-residential activity, while 55 percent and 48 percent, respectively, expect residential work to decrease. Eleven percent of both contractors and distributors believe residential construction activity will increase. Non-residential construction appears to be in slightly better shape given that 15 percent of contractors and 17 percent of distributors forecast an increase in that type of work.

While 2009 is shaping up to be a challenging year, most contractors (73 percent) and equipment distributors (63 percent) who foresee a decrease in construction activity see a turnaround coming 12, 18 or 24 months from the time of survey in October 2008. The largest share of these distributors (28 percent) and contractors (22 percent) predict that improvement will come 12 months from the time of survey.
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