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Juan Rodriguez

Housing and Non-Commercial Recovery Report Fall 2011

By July 27, 2011

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construction, forecast, recovery

A slight decline in the construction industry is being forecasted by the AIA Consensus Construction Forecast panel during the upcoming months of this year. However, the good news is that a 6.4% upward trend is also forecasted for 2012. The recommendation is based on rising construction costs, weak government finances, and inability to finance construction projects in the private sector.

The forecast panel is also acknowledging a stronger recovery on the commercial sector, almost 12%, while the manufacturing industry will see an 8% recovery.

Recovery Factors

The construction industry will tend to recover when some signs could get stabilized, such as energy costs, growing debt issues, unemployment and significant weather conditions. Global markets and weakness of global economics are also affecting the construction recovery. Greece, China, and Europe's financial problems are stepping into the middle of recovery efforts causing high impact on material prices, affecting the world-wide material supply.

Emerging Markets Influence Recovery

The construction industry is struggling to recover in certain areas, while some states like Michigan is showing an increase of at least 5% in construction related jobs. Several other states are showing some signs of recovery and Nonresidential estate leasing markets are showing stable conditions.

Finally, construction materials have increased generally over the past year, but these rising prices have been minimal when compared to petroleum-based products. The report states that the nonresidential sector is finally picking up, nonetheless, the recovery road is quite long and will need a stronger recovery from the home building sector; a sector that will drive jobs, recovery that will likely take place early on 2012.

This report along with the AGC Forecast for upcoming months report will bring some confidence on all construction related professionals.

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