Economists Forecast Growth in US Commercial Construction for 2008

The non-residential construction sector in the U.S. will experience strong growth in 2008, despite the heavy drag coming from the decline of the residential construction market, says a panel of construction economists south of the border.

The Associated General Contractors (AGC) of America produced its 3rd Annual Economic Forecast on December 13th to discuss the direction of the U.S. construction industry in 2008.

The conference featured three experts on construction economics, who assessed the impact of the downswing in residential construction on the construction sector and the economy.
'The housing market has been extremely weak this year,' said Daryl Delano, principal and chief economist at Delano Data Insights.

'There was an extraordinary decline, with residential construction down 17 per cent and housing starts falling by 25 per cent.'

He explained that the decline in residential construction caused an overall decline in total construction spending of around two to three per cent.

'This is the first downturn in overall construction spending since 1991,' he said.

According to Delano, in 1991 both residential and non-residential construction declined.
There is more strength in the construction sector than the last severe downturn, because this year construction is better on the non-residential side.

Simonson predicted that non-residential construction will increase by three to seven per cent in 2008.

Delano predicted that non-residential construction will increase by about seven per cent.

However, this prediction represents a significant drop, since non-residential construction grew by 14.5 per cent in 2007 and 12.3 per cent in 2006.