Something to note today and when we get into 2011 and credit-seeking mongrels in DC begin to open their collective mouths: “The U.S. economy is in the second year of economic expansion,” said Kathleen Camilli, president of Camilli Economics. “While the growth rate is currently modest, momentum is likely to grow as the economy responds to ongoing monetary and fiscal stimulus in the pipeline. Not withstanding the financial crisis’ impact on residential and nonresidential construction, growth in this sector of the economy will continue to be driven by innovation in building technologies.”

Camilli’s quote is backed up by McGraw-Hill Construction’s 2011 Construction Outlook, a mainstay in construction industry forecasting and business planning, which predicts an increase in overall U.S. construction starts for next year. The level of construction starts in 2011 is expected to advance 8% to $445.5 billion, following the 2% decline predicted for 2010.

“We’re turning the corner, slowly. 2011 will be the first year of renewed growth for overall construction activity, and 2010 becomes the final year of a very lengthy and unusual construction cycle,” said Robert A. Murray, vice president of economic affairs at McGraw-Hill Construction. Based on significant research and in-depth analysis of macro-trends, the 2011 Construction Outlook details the forecasts for each construction sector, as follows.

* Single family housing in 2011 will climb 27% in dollars, corresponding to a 25% increase in the number of units to 565,000 (McGraw-Hill Construction basis).
* Multifamily housing will rise 24% in dollars and 23% in units, continuing to move gradually upward.
* Commercial buildings will increase 16%, following a three-year decline, which dropped contracting 62% in dollar terms. The levels of activity expected for stores, warehouses, offices and hotels in 2011 will still be quite weak by historical standards.
* The institutional building market will slip an additional 1% in 2011, retreating for the third straight year. The difficult fiscal climate for states and localities will continue to dampen school construction, although the healthcare facilities category should see moderate growth.
* Manufacturing buildings will increase 9% in dollars and 11% in square feet.
* Public works construction will drop 1%, given the fading benefits of the federal stimulus act for highway and bridge construction.
* Electric utilities will slide 10%, falling for the third year in a row.

Bottom line: If you’re blessed with cash, equity or IRA funds, it’s not too late. Invest “well” now.


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