Nonresidential construction will plummet, recover in 2011

March 10, 2009 |

FMI’s Construction Outlook, a quarterly construction market forecast developed by FMI’s Research Services Group, forecasts nonresidential construction will plummet and begin at least three years of contraction. The bottom, in terms of both dollar volume and percent decline, will not be until 2010. Residential construction is not expected to recover until 2011.

Report highlights include:

• Project delays are four times the normal rate and are currently at 20% (up from three times in 3Q08).

• Project cancellations are five times the normal rate and are currently at 10% (doubled from 3Q08).

• An important bill to the outlook for construction is the America’s Better Classrooms Act, which provides $25 billion for 0% interest school construction bonds.

• The stimulus bill is not going to single-handedly save the construction industry.

Amidst all the economic doom and gloom, there are a few bright spots:

• Inflation has remained under control so far.

• Prices are down for most materials.

• The stimulus bill will help to mitigate some loss.

• There is still a large amount of construction being put in place.

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.

For more information about FMI’s Construction Outlook: First Quarter 2009, contact Kathryn Robinson of FMI Corporation at 919-785-9211 or

About FMI
FMI, management consultants and investment bankers to the construction industry, delivers innovative solutions to contractors, architects and engineers, construction materials producers, manufacturers and suppliers of building products and construction equipment, private owners, residential builders, utilities, government agencies, surety companies and trade associations.

FMI’s management consulting practice provides a wide array of services, including strategy, training and talent development, leadership and organizational development, market research, project execution, business development and compensation consulting. FMI’s investment banking practice provides merger and acquisition advisory services, capital placement and financial advisory services.

Founded in 1953, FMI is headquartered in Raleigh, N.C., and has offices in Denver, Phoenix and Tampa, Fla.

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