Construction investment banking and management firm FMI predicts an increase in nonresidential construction in North America in 2008, although the pace of growth is expected to slow.
Nonresidential construction was booming in 2007 and will increase again in 2008, although at a slower rate, FMI says. Nonresidential construction will expand at a 5 percent rate in 2008 and a 4 percent rate in 2009 as the declines in residential begin to lower demand for certain nonresidential segments.
“There are several drags on the economy such as housing and credit tightening. However, resilient consumers, businesses and exports have so far been able to prop it up,” said Heather Jones, construction economist for FMI’s Research Services.
FMI does not expect housing construction to recover until 2009. However, FMI believes that put in place construction will realize a smaller decline than housing starts due to rising labor and material costs, upgrades and the use of higher-end materials. Despite large declines in total residential and single family construction, both will remain at a high level.
FMI publishes a quarter report, Construction Outlook, based on building permits and construction put in place data as provided by the U.S. Commerce Department. Forecasts are based on econometric and demographic relationships developed by FMI, on information from specific projects gathered from trade resources and on FMI’s analysis and interpretation of current and expected social and economic conditions.
--RSN