Recession catches up with construction industry
| November 16, 2010 |
Associated Builders and Contractors released its 2011 economic forecast for the U.S. commercial and industrial construction industry.
The national recession, which began in 2007, is catching up with the construction industry. Nonresidential construction typically lags the overall performance of the U.S. economy by 12 to 24 months. The weakness of the overall U.S. economy, coupled with a deep financial crisis and accompanying credit crunch, wreaked havoc on all sectors of nonresidential construction.
According to U.S. Census Bureau data, nonresidential construction spending declined 9 percent in 2009 and ABC projects that spending will fall 14.7 percent this year.
Segments positioned for decline include those that are closely linked to state and local government spending. With many states and localities trimming both operating and capital budgets, the expectation is that construction volumes in the education category will slip next year.
ABC expects that 2012 will be better for privately financed construction. Credit conditions will improve by that point as large, well-capitalized banks become more aggressive in their pursuit of industry market share.