Total construction in 2009 and 2010 will be down 14 percent and 5 percent respectively, according to FMI’s Construction Outlook. The outlook for the general economy is improving, the report says, but has yet to translate into improvement in the construction markets.

FMI said residential construction will decline 25 percent for full-year 2009 and will recover in 2010. However, after a 13-percent nonresidential construction drop in 2009, the segment will plunge an additional 16 percent in 2010, the report said. Nonbuilding construction will, however, increase 5 percent per year.

Total residential construction will be $268.5 million in 2009, down from the 2006 high of $619.8 million, making 2009 the worst year for housing starts since records began being kept in 1959, FMI said.

Power construction is expected to remain positive for the next five years, attaining new highs each year, reaching $122.1 billion in 2013.

Year-to-date nonresidential put-in-place construction through July is flat year over year, but is expected to decrease sharply in the second half of 2009. Contractors are reporting backlogs of eight months in the third quarter, down from 11 months in the first quarter. Tight credit continues to cause cancellations and delays. Project cancellations are five times the normal rate.

The report says the American Recovery and Reinvestment Act of 2009, popularly known as the stimulus bill, is working for what it was intended for, mainly to help stimulate infrastructure spending and mitigate some of the loss in highway construction caused by declining state revenues. Stimulus funding has primarily been spent on paving and widening projects.

The report adds that while the economy shows some signs of improving, nonresidential construction typically lags the general economy by about 18 months.

To see the report, visit www.fminet.com.