ASHRAE Journal - January 2009 - (Page 8) BOSTON—The building construction market looks bleak going into 2009, but most sectors will start seeing a slow improvement later in the year. Jim Haughey, Ph.D., director of economics at Reed Construction Data, told ASHRAE Journal that the credit problems have been largely corrected. Further declines in construction spending will be mainly due to slumping demand for space and less to loan application denials. “Almost everybody who has good credit will get it, but it’ll be a bit more expensive,” he says. “What has changed is that people with marginal credit won’t have access to money.” *Percent change is year vs. previous year. Actuals: U.S. Census Bureau, Department of Commerce. Forecasts and table: Reed Construction Data. He says this recession came as a surprise to a lot of people, and set off a panic. “I think we’re seeing a front-loaded recession. We’ll have an ugly winter, but we’ll start seeing improvements after that.” He says the residential sector is likely to recover first because “all excesses will have been squeezed out of the market.” The recovery of the nonresidential private sector, however, will be slower Forecast 2009 Forecast: Ugly Early, Slowly Better U.S. Construction Spending Change Year 2005 2006 2007 2008 2009 2010 Residential* 15.1% –1.7% –24.2% –33.8% –14.9% 16.6% Nonresidential 7.0% 12.8% 17.6% 12.1% –0.5% 2.3% and vary by sector. Retail construction, for example, will be weak because of slow consumer spending. “Wal-Mart is doing well, but all others are hurting,” he says. Office construction also will be weak, especially in places such as New York City and Washington, D.C. “For the first time, we’ve seen a big drop in professional employment,” he says. “This means they’ve given up on expansion and it will be a while for this to change.” He says publicly financed construction, such as schools, was slower to feel the downturn because financing was in place when the market dropped. This sector, he says, will be slower to return because of weakness in tax collections and reluctance by governments to launch new tax-financed projects. Hospital construction, he says, will best weather the recession because revenues have not been greatly affected. Actual 8 ASHRAE Journal www.info.hotims.com/22183-133 January 2009 http://www.triatek.com http://www.triatek.com http://www.info.hotims.com/22183-133
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.