Sector feels the squeeze of continuing construction recession
Predicting the manufacturing and construction markets for the coming year is a tricky business in any financial climate, and this year, with a new president in the United States and a global financial crisis, it’s even more difficult. Due to the uncertainty of our times, economists looking at the North American market provide various and sometimes conflicting viewpoints of how the construction sector will perform in 2009. Nearly all agree that the recession in the construction industry will continue. Where they differ is on the depth of the recession, the length of time before recovery begins and the degree to which individual sectors of residential, commercial and public works construction will be affected.
Even with this unpredictability, certain indicators make educated guesses possible. Based on what we know at the end of 2008, the National Precast Concrete Association estimates that the U.S. construction industry will decline by 6% in 2009 before recovery starts sometime in the second half of 2010.
As usual, the residential housing market holds the key to the health of the overall construction industry in the United States, and housing is nowhere near a recovery. The subprime mortgage crisis that started in the U.S. and has plagued the world for the last six months will likely take at least two years of concerted effort to sort out. It’s possible that new housing construction could recover toward the end of that two-year period, but it won’t likely happen until sometime in 2010, according to Ty E. Gable, NPCA president. “We still have a large inventory of unsold new housing and additional existing housing units continue to flood the marketplace as homeowners give up foreclosed properties,” Gable said. “Residential construction cannot rebound until the financial crisis gets sorted out, and that continues to drag down both the construction industry and the U.S. economy.”
