McGraw-Hill Construction has released its 2012 Dodge Construction Outlook, which predicts that overall U.S. construction starts for next year will remain flat.
It’s possible that housing and commercial building construction starts may improve, but will be offset by weakness in the public works and institutional building sectors. The level of construction starts in 2012 is expected to be $412 billion, following the 4% decline to $410 billion predicted for 2011.
Based on research and analysis of macro-trends, the 2012 Dodge Construction Outlook details the forecasts for each construction sector, as follows.
- Single family housing in 2012 will improve 10% in dollars, corresponding to a 7% increase in the number of units to 435,000 (McGraw-Hill Construction Dodge basis). This is still a low amount, as the excess supply of homes due to foreclosures continues to depress the market.
- Multifamily housing will rise 18% in dollars and 17% in units, continuing its moderate, upward trend.
- Commercial building will grow 8%. Warehouses and hotels will see the largest percentage increases, but improvement for offices and stores will be modest.
- The institutional building market will slip an additional 2% in 2012, after falling 15% in 2011. The tough fiscal environment for states and localities will continue to dampen school construction, and the uncertain economic environment will limit growth in healthcare facilities.
- Manufacturing buildings will increase 4%, following the 35% gain in 2011, as the low value of the U.S. dollar continues to support export growth.
- Public works construction will drop a further 5%, after a 16% decline in 2011, due to spending cuts and the absence of a multiyear federal transportation bill for highway and bridge construction.
- Electric utilities will retreat 24%, following a 48% jump in 2011.
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