Total construction starts for 2013 will increase 6 percent to $483.7 billion, slightly higher than the previous year’s 5-percent increase to $458 billion estimated for 2012, according to Robert Murray, McGraw-Hill Construction’s vice president of economic affairs. MHC’s estimate of new construction starts increased 2 percent in 2010 and 1 percent in 2011.
“This still leaves the volume of total construction starts 32-percent below the 2005 peak on a current dollar basis and down about 50 percent when viewed on a constant-dollar basis,” added Murray. “The fiscal cliff poses a significant downside risk to the near-term prospects for the U.S. economy and the construction industry. Assuming that efforts to cushion the full extent of the fiscal cliff are successful next year, keeping the U.S. economy from sliding back into recession, then there are several positive factors to benefit construction, including low interest rates and improving market fundamentals for several project types.”
According to Industrial Info Resources, capital and maintenance project activity for the industrial manufacturing industry — durable and nondurable goods manufacturing, plus infrastructures — totaled $27.9 billion in 2011, and is expected to just top $25 billion in 2012, although could still change. IIR expects a solid base of project activity to begin 2013.
The National Association for Business Economics’ quarterly survey of 67 corporate economists “suggests continued flatness in sales, profit margins, and employment, as well as expectations of moderately slow real GDP growth. About 64 percent of the 44 panelists who answered the question believe that their firm’s spending on structures will stay about the same over the next 12 months, and 27 percent of panelists believe that it will increase.”
(Material for this article provided by the Association for General Contractors)