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Market Hesitation May Slow U.S. Commercial Building in 2008
Published: October 25, 2007
Source: The Wall Street Journal
New York -- Widespread economic concern appears to be slowing U.S. commercial construction activity, which currently is half of the overall $1.2 trillion construction economy, The Wall Street Journal reports.
McGraw-Hill Construction, in a report expected to be released today, will predict commercial and manufacturing buildings spending -- which will likely end with an 11 percent increase in dollar volume in 2007 -- will decline 7 percent next year in dollar volume and 10 percent in the number of square feet of space constructed.
Based in part on construction starts, which often very accurately indicate future construction spending, the McGraw-Hill forecast all suggests that total construction spending -- including residential, which McGraw-Hill feels will not see this year's sharp declines in 2008 -- will drop 2 percent in 2008. This year is expected to show an 8 percent decline.
If the predictions are correct, 2008 will be the first time since the 1990s recession that overall spending fell for two consecutive years.
