The construction industry suffered serious declines during the recession. And the American Institute of Architects' semi-annual Consensus Construction Forecast shows only a few bright spots for 2010. Not surprisingly, the organization does not foresee a rise in residential construction until 2011.
The only category predicted to show an increase is public safety, with an expected 0.8% rise in 2010. However, the outlook is much better for the heavy construction category. Reed Construction foresees a rise in spending in several sectors and bases its optimism on:
- Continued disbursement of federal stimulus funds as planned.
- Funding of mini-stimulus plan this year with $30 billion for public works projects.
- Congress will allocate fresh money into the federal Highway Trust Fund in early spring 2010.
As a result, the following sectors will see increased activity in 2010:
- Transportation 6.2%
- Highway 5.6%
- Water & sewer 0.1%
- Conservation & Development 2.1%
Look for increased B to B marketing activity as engineering firms pitch their services to design projects and as equipment and supply vendors pitch products and services to contracting firms. In some markets, contractors may even begin advertising for additional skilled employees. Nobody’s expecting construction activity to return to the overheated levels of 2005–2006, but any projected increase in spending looks like the start of good news.[Source: Heavy Construction Spending Rose 0.4% in November, Reed Construction, 1.5.10; AIA Forecast, California Construction, 1.7.10]