Construction spending may not grow until 2011

Total construction spending in the U.S. on an annual basis is forecast to fall 12.2 percent this year and 5.6 percent in 2010 before growing 7.6 percent in 2011 and achieving double-digit growth in 2012, according to the Fourth Quarter U.S. Construction Briefing by Lexington, Mass.-based IHS Global Insight’s Construction Service. While the construction industry has been showing pockets of resurgence, particularly in the residential sector, nonresidential construction will continue declining for many quarters to come. Commercial construction, in particular, is forecast to post sharp year-on-year declines through 2010, overwhelming the developing strength in the residential sector and dragging annual total construction growth down into negative territory. The broader U.S. economy, meanwhile, has moved back into the black and is showing positive GDP growth for the first time since the second quarter 2008. However, credit remains constrained, employers are still shedding jobs, though the pace slowed in November, and consumer and business confidence remain low—all issues that affect the construction industry. For the Fourth Quarter U.S. Construction Briefing Executive Summary, go to www.ihsglobalinsight.com/constructionoutlook.