Construction Industry to Suffer along with Housing Market

As the housing market remains in a slowdown and demand for home loans wanes, it’s not only sellers that are suffering.

There’s an expected drop in single-family home construction on the way, one that will pull down the 2007 market by 1 percent to $668 billion, according to an industry forecast.

The construction industry “no longer has single-family housing to bolster total construction,” according to Robert Murray, vice president of economic affairs and chief economist of McGraw-Hill Construction, which released the forecast at a recent conference.

The single-family construction market boomed from 2000-2005 and remained high until 2006, when it deflated at a faster rate than expected.

“Single-family housing has fallen more steeply than what we had anticipated, and the correction is taking place faster,” said Murray.

Despite this 5 percent forecasted decrease in single-family housing, as individuals hold off on mortgage applications to see where prices go, McGraw-Hill expects the construction industry to have several growth sectors.

Among the construction market data in the report’s findings for 2007:

• Institutional buildings will advance 7 percent in dollar volume and 4 percent in square footage.

• Manufacturing building is expected to rise 14 percent from a lackluster 2006 performance.

• Public works construction will grow 5 percent on top of the 10 percent increase in 2006 due to highway and bridge construction, as well as environmental projects.