Several constraints on the construction industry, specifically low demand for commercial space, potential rising interest rates and reduced tax revenues eventually impacting public works and institutional buildings, will contribute to a one percent decrease in overall construction growth in 2003. That is according to Robert Murray, chief economist of McGraw-Hill Construction.
"Over the past two years, the construction industry has exhibited a split personality. On the plus side, single family housing has been robust, advancing to the point that 2002 will see the highest level of new starts in over two decades. Public works, supported by elevated contracting for highways and bridges, has maintained the steady growth present at the end of the 1990s. Institutional building, led by the school construction boom, achieved a record high in 2001 and should come close to matching that amount in 2002," said Murray.
The value of new construction starts for 2002 is projected to be steady, holding in the range of $495 billion to $500 billion. This follows total construction gains of 5 percent in 2001 and 6 percent in 2000, as well as 10 percent average annual growth during the 1996-1999 period.