FMI Releases Construction Outlook Report
December 16, 2008 – Raleigh, N.C.-based FMI, management consultants and investment bankers for the building and construction industry, recently released its Construction Outlook: The Fourth Quarter 2008 Report.
The Construction Outlook, a quarterly construction market forecast developed by FMI’s Research Services Group, looks at the good, the bad and the ugly of the economic future of construction over the next few years. On the positive side, nonresidential construction will close out 2008 in positive territory. But the report said that 2009 will bring an end to five straight years of nonresidential construction growth. In addition, downturn of growth in 2009 will continue through 2010, which should mark the bottom in terms of dollar volume. Transportation construction is the only nonresidential segment likely to grow in 2010.
However, the housing sector has good long-term growth prospects. With the population expected to increase by 100 million people over the next 30 years, there will have to be more housing. This population growth and eventual increase in residential construction also bodes well for the future growth of nonresidential construction.
Another important indicator for construction is the federal funds rate, which as of the end of October is at its lowest rate since 2003 at 1 percent. The Fed said the “intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of household and business to obtain credit.â€
Heather Jones, a construction economist for FMI’s Research Services Group, is responsible for design, management and performance of primary and secondary market research projects and related research activities, including economic analysis and modeling, construction market forecasting and database management. Her particular expertise is in the areas of market sizing and modeling, competitive analysis, sales and market performance evaluations, buying practices and trend analysis.
