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The Construction Outlook as of May 2009

 

 

 

Podcast: 2009/05/28 - 20:28

Presenters: Kermit Baker, PhD, Hon. AIA and Robert Murray

 

 

Robert Murray is vice president, economic affairs for McGraw-Hill Construction, a division of The McGraw-Hill Companies.
Bob has been with McGraw-Hill since 1980, and he is the author of the widely circulated McGraw-Hill Construction Outlook. He coordinates the company’s five year forecast product, the Construction Market Forecasting Service, which offers detailed projections of construction activity for the U.S. and nine major regions.

Kermit Baker, Ph.D., Hon. AIA, is chief economist of the AIA. For the past 13 years, he has overseen the AIA Architecture Billings Index, a monthly poll of firms nationwide gauging the rise and, recently, of course, fall of billings and client inquiries. Baker also directs the biannual AIA Construction Consensus Forecast.

AIA Chief Economist, Kermit Baker and Vice President for economic affairs at McGraw-Hill Construction, Robert Murray provide insight into the current state of construction in the United States and forecast trends for the future of the building industry. Both Baker and Murray give an honest assessment of what to expect in the next two years in terms of an upturn in residential and non-residential construction. So, will there be better times ahead?

According to Robert Murray the downward trend in non-residential construction is still in progress however, by 2010 we can expect to see the decline become not as severe and the onset of 2011 will bring the possibility of a broad based upturn. However, there are many improvements that must be made between now and 2011 if we are to see a sustained upturn. Most importantly, the financial system must be strengthened. It is hard to get ahead in construction, especially for non-residential projects, with a lack of additional funding. Also, with the loss of jobs comes a decline in the demand for office spaces, hotels and stores and justification for construction becomes difficult.

Although the non-residential sector of the building industry is currently experiencing a dramatic weakness, both Baker and Murray reassure us that there are some saving graces for the market. Kermit Baker, who overseas the Architectural Billings Index, recently received March numbers that predict signs of life for the industry. Surveying approximately 500 architecture firms a month, the Architectural Billings Index is believed to be an accurate assessment of what we will be seeing over the next few months and years. Other positive signs for the construction industry include the possibility for increased institutional construction. Portions of the Stimulus Bill will provide opportunities for the institutional building sector, which includes hospitals, schools, Veteran's housing, etc.

 

 

 

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