No Big Surprises for 2013. The Construction Industry Forecast for 2013 is showing some slow improvement but completely unpredictable as funding for construction project will become the most important factor. The McGraw-Hill 2013 Construction Forecast was recently released and as it predicted this year, the next one will probably be the same as this 2012. The report predicts that total U.S. construction starts for 2013 will rise 6% to $483.7 billion, slightly higher than the 5% increase to $458 billion estimated for 2012.
Construction Forecast 2013 Starts
Although public works will keep struggling to get it going, housing and non-residential building should carry the construction industry and will show an increase of 6% of total construction starts. Total construction start will fall short from 2007’s $641 billion, to a little over $480 billion, as public sector will drag down that number. All construction starts shall be led by the housing industry that has been an improving steadily over the past months.
Construction Forecast 2013 Federal Help
A really important factor that could revitalize the construction industry in 2013 is tax cuts that were introduced by President Bush. It is vital that Congress get to an agreement to maintain these tax cuts, many of them set to expire during the next months. In addition it is critical to soften the adverse impact that will have the 2011 Budget Control Act that brought conclusion to the 2011 United States debt-ceiling crisis.
Construction Forecast 2013: Housing
The McGraw Hill 2013 Construction forecast provides a real positive outcome on housing. Single housing should be close to $150 billion, more than 20% of 2012 number. It is important to highlight that according to the forecast the 2012 has seen an increase in housing close to 27%. In addition to the single housing expected rise, the multifamily housing industry should also get solid number; 16% over this years’ totals.
Construction Forecast 2013: Commercial
Commercial buildings will double the rate for 2012, being close to 12%, seven more than this year’. Hotels, warehouses and office construction probably will not get too many new starts, but will likely see an increase related to upgrades, energy efficiency improvements and retrofits. The construction forecast on the commercial area should be fueled by lower vacancy rates and competition to fill empty spaces.
The manufacturing industry is another sector that could post positive number on 2013, a great turnaround from a large drop in 2012. It is expected to generate more than $12 billion in new starts during 2013, growing at least 8% from previous year.
Construction Forecast 2013: Utilities
Electrical related projects will be hard-hit during 2013, dropping near 30%, due in part by expiration of section 1603 related to renewable projects. During 2012 the electrical utility industry showed great numbers associated with large nuclear power plants being developed. However, the U.S. Army Corps of Engineers has a proposal out for $7 billion in locally generated renewable energy through power purchase agreements.
General public construction during 2013 will keep sinking one more percentage as indicated in the Construction Forecast. However, the transportation program, Moving Ahead for Progress in the 21st Century Act, could add important numbers on highways and bridge construction.
The FAA Modernization and Reform Act will provide $63.6 billion for the agency’s programs between 2012-2015.
Construction Forecast 2013: Looking Ahead
While it might not be the best year, and will not get close to numbers posted during 2007 the construction forecast for 2013 should follow closely on the following:
- Congress Tax and Budgetary policy
- European stability
- Nuclear Power Construction
- Improvements on the Research and Development areas
- Transportation Improvements
- Energy Projects and Renewable Energy, specially waste to energy projects
- Advances in the medical and healthcare technologies
- Automotive Industries