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Not Enough Change in 2013 Construction Forecast11-01-12 | News

Not Enough Change in 2013 Construction Forecast

McGraw Hill Construction is predicting 6 percent growth for the construction starts in 2013, fueled largely by private investment and continuing housing market expansion. The forecast, only slightly improved over the 2012 estimate of 5 percent growth, gives little indication that the industry will return to healthy, pre-recession levels anytime soon.

Construction projects will continue to make gains next year, according to a leading forecast, but federal fiscal instability could erase improvements if left unattended.

Total construction starts will rise 6 percent next year to $483.7 billion, buoyed by a continuing rebound in housing and private nonresidential building that should outweigh weakness in institutional building and public works markets, says McGraw Hill Construction's (MHC) 2013 economic forecast.

The 6 percent growth would be a marginal improvement over the estimated 5 percent increase in 2012, though $483.7 billion remains a far cry from 2007's $641-billion and 2008's $559-billion totals.

Single-family housing is expected to increase 24 percent in 2013 to $153.1 billion, following this year's 27 percent gain, and multifamily housing starts are predicted to climb 16 percent to $40.3 billion next year.

''The pattern of construction starts seems to be in a balancing act,'' MHC chief economist Robert Murray said in a statement. ''Gains for a few project types are offset by declines for other project types.''

''The fiscal cliff poses a significant downside risk to the near-term prospects for the U.S. economy and the construction industry,'' Murray added. The 2013 forecast, released October 24, assumes Congress will enact measures to stave off the round of spending cuts and tax increases scheduled for the end of this year.