A newly released report by FMI, a consulting and investment banking firm to the building and construction industry, predicts that worsening economic conditions may forestall the housing recovery until 2009, with this year’s residential building activity declining 10 percent for single-family housing, 7 percent for multi-family and 2 percent for remodeling.
The Construction Outlook report also saw decreases in the commercial, office, religious, amusement and leisure segments, all of which are tied into the economy. But certain publicly funded non-residential sectors -- health care, educational, public safety and Homeland Security -- will fare better, according to FMI. Health care construction will benefit from facility upgrades across the country; educational institutions will fund new projects with endowments or voter-approved bonds in several states; new police and fire stations, as well as prisons, are in the construction pipeline; Homeland Security improvements to U.S. ports and border areas are underway; and airport delays will necessitate expansion projects.
The full report, available at www.fminet.com, also addresses manufacturing-related construction, which FMI believes will remain flat in 2008 and 2009 based on “several multi-billion dollar projects under construction at the same time.” Increases in cement capacity, refineries and steel manufacturing will contribute to these gains, the research said.