Construction market expected to show modest growth in 2013

McGraw-Hill Construction, a division of The McGraw-Hill Cos., New York, recently released its 2013 Dodge Construction Outlook, which predicts that construction starts in 2013 will rise 6 percent to $483.7 billion. This follows the 5 percent increase expected for 2012.

“As reported by McGraw-Hill Construction, new construction starts in 2010 edged up 2 percent, followed by another 1 percent gain in 2011, and 2012 is headed for a 5 percent increase to $458 billion,” says Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. “This still leaves the volume of total construction starts 32 percent below the 2005 peak on a current dollar basis and down about 50 percent when viewed on a constant dollar basis. The modest gains experienced during the past two years have in effect produced an extended bottom for construction starts in which the process of recovery is being stretched out.

“The fiscal cliff poses a significant downside risk to the near-term prospects for the U.S. economy and the construction industry,” he continues. “Assuming that efforts to cushion the full extent of the fiscal cliff are successful next year, keeping the U.S. economy from sliding back into recession, then there are several positive factors to benefit construction, including low interest rates and improving market fundamentals for several project types.”

Expectations released in the 2013 Dodge Construction Outlook include:

  • Single-family housing climbing 24 percent in dollars and 21 percent in the number of units
  • Multifamily housing increasing 16 percent in dollars and 14 percent in units
  • Commercial buildings increasing 12 percent in dollars
  • Institutional buildings leveling off
  • Manufacturing buildings increasing 8 percent in dollars
  • Public works construction falling 1 percent
  • Electric utility construction dropping 31 percent