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U.S. Construction Industry to Remain Flat in 2012

A new 32-page report from McGraw-Hill Construction predicts that overall U.S. construction starts for 2012 will remain "flat." The "Dodge 2012 Construction Outlook" discusses why total construction will bounce along at current levels over the next year - rather than staging a long-awaited recovery - and provides the underlying reasons why some sectors will start to show improvement.

"The construction industry has struggled to see recovery take hold over the past couple of years," said Robert Murray, VP of Economic Affairs for McGraw-Hill Construction. "After plunging 24 percent in 2009, new construction starts leveled off in 2010 and have hovered within a set range during 2011. The backdrop for the construction industry is the fragile U.S. economy, which continues to see slow employment growth, diminished funding from federal and state governments, and pervasive uncertainty."

Next year the top-line numbers are not expected to show much change, said Murray, "but there will be variation within the major construction sectors, with some gains predicted for housing and commercial building assuming the U.S. economy avoids recession."

Some of the report's highlights include:

• The level of construction starts in 2012 is expected to be $412 billion, following the 4 percent decline to $410 billion predicted for 2011.

• Single-family housing in 2012 will improve 10 percent in dollars, corresponding to a 7 percent increase in the number of units to 435,000 (McGraw-Hill Construction Dodge basis). This is still a low amount, as the excess supply of homes due to foreclosures continues to depress the market.

• Multifamily housing will rise 18 percent in dollars and 17 percent in units, continuing its moderate, upward trend.

• Commercial building will grow 8 percent. Warehouses and hotels will see the largest percentage increases, but improvement for offices and stores will be modest.

• The institutional building market will slip an additional 2 percent in 2012, after falling 15 percent in 2011. The tough fiscal environment for states and localities will continue to dampen school construction, and the uncertain economic environment will limit growth in healthcare facilities.

• Manufacturing buildings will increase 4 percent, following the 35 percent gain in 2011, as the low value of the U.S. dollar continues to support export growth.

• Public works construction will drop a further 5 percent, after a 16 percent decline in 2011, due to spending cuts and the absence of a multi-year federal transportation bill for highway and bridge construction.

• Electric utilities will retreat 24 percent, following a 48 percent jump in 2011.

To buy the $495 report, visit on the McGraw-Hill Construction website.


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