McGraw-Hill Sees Higher Housing Starts in 2012

Atlanta, GA, Nov. 23, 2011 -- McGraw-Hill Construction predicts that overall U.S. construction starts for next year will remain essentially flat, although some sectors such as housing will fair much better.

The firm's new construction forecast projects the level of construction starts in 2012 at $412 billion, following the 4% decline to $410 billion for 2011.

"The construction industry has struggled to see recovery take hold over the past couple of years. After plunging 24% in 2009, new construction starts leveled off in 2010 and have hovered within a set range during 2011,” said Robert Murray, vice president of economic affairs, McGraw-Hill Construction.

“The backdrop for the construction industry is the fragile U.S. economy, which continues to see slow employment growth, diminished funding from federal and state governments, and pervasive uncertainty. In 2012, the top-line numbers are not expected to show much change, but there will be variation within the major construction sectors, with some gains predicted for housing and commercial building assuming the U.S. economy avoids recession.”

The firm predicts that single family housing in 2012 will improve 10% in dollars, corresponding to a 7% increase in the number of units to 435,000. The sector will continue to be held back by an excess supply of homes.

Multifamily housing will rise 18% in dollars and 17% in units, continuing its moderate, upward trend.

Commercial building will grow 8%. Warehouses and hotels will see the largest percentage increases, but improvement for offices and stores will be modest.

The institutional building market will slip an additional 2% in 2012, after falling 15% in 2011. The tough fiscal environment for states and localities will continue to dampen school construction, and the uncertain economic environment will limit growth in healthcare facilities.