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Engineering News-Record and Architectural
Record Each Win 2002 Jesse H. Neal Awards
McGraw-Hill
Construction Information Group Publications Recognized for Editorial
Excellence in Business Journalism
Construction Industry Will Continue to Lose
Momentum Through Early 2002; Second Half Improvement Will Enable
2002 To Match 2001 Activity
Robert Murray Delivers Annual Construction
Forecast at Outlook 2002 Executive Conference in Washington D.C.
WASHINGTON - (October
30, 2001) - Hesitant home-buyers, cautious real estate investors,
the weaker fiscal standing of state and local government and a reduced
demand for commercial space will pose the biggest challenges to
the construction industry during the first half of 2002. But despite
those issues, low interest rates and the potential support of a
federal stimulus package should help construction activity improve
during the second half of 2002. The result is that the value of
new construction starts for all of 2002 is projected at $481.0 billion,
just slightly below the $481.4 estimated for 2001.
That outlook was presented by Robert Murray,
vice president of economic affairs for the Construction Information
Group, a division of The McGraw-Hill Companies (NYSE: MHP). Mr.
Murray delivered his annual forecast to industry leaders at F.W.
Dodge's Outlook 2002 Executive Conference held at the Capital Hilton
in Washington, D.C.
"Against the backdrop of a slowing economy, construction has stayed
reasonably healthy for most of 2001, helped by an offsetting pattern
by project type. It's true that commercial building has lost considerable
momentum this year, dampened by weaker business conditions and tighter
bank lending standards. However, further expansion was reported
for public works, electric power plants, and schools. In addition,
single-family housing for much of 2001 has stayed strong -- even
factoring in a fourth quarter decline, single family housing should
be able to match 2000 levels," said Mr. Murray.
For all of 2001, Dodge construction starts are projected to climb
2 percent from 2000 levels (reaching $481 billion). Although it
is only modest growth, 2001 will have marked the 10th consecutive
year of expansion for construction activity, when viewed on a current
dollar basis.
Prior to September 11th, the economy was already teetering close
to recession. Economic growth during the first quarter of 2001 was
reported at 1.3 percent, followed by 0.3 percent in the second quarter.
According to Mr. Murray, "the impact of the events of September
11th will be to deepen and lengthen the economic slowdown already
underway. Substantial layoff announcements in travel-related industries
join high technology as depressed sectors of the economy. The weak
job market, along with diminished confidence levels, means that
consumer spending will not provide the same support as in previous
years. However, the stage has been set for the economy to improve
as 2002 proceeds, given lower interest rates and the fiscal push
coming from the federal government. This will also have a positive
impact on the construction industry."
Mr. Murray had the following to say about the year ahead for specific
areas of the construction industry:
· Single-family housing
will retreat through early 2002, as home sales and construction
are adversely affected by the weak job market and diminished consumer
confidence. When uncertainty eases, homebuyer demand will be able
to show a greater response to low mortgage rates. The full year
is projected at 1.175 million units (F.W. Dodge), a 2 percent decline
from 2000, which translates into no change in dollar terms.
· Public works
construction will advance 2%, as continued expansion for highways
and bridges counters a slower pace for other public work categories.
· Electric utilities,
following robust growth the previous four years, will begin to settle
back as the post-deregulation surge in new power plant construction
recedes.
· Income properties
will slide an additional 3 percent drop in dollar volume, corresponding
with a 5 percent drop in square footage. The steepest decline is
projected for hotels, while stores, warehouses and offices will
experience moderate retrenchment. Apartment construction is the
income property type most likely to avoid a decline, since it continues
to be viewed favorably as a target by the real estate finance community.
· Institutional building
will advance 3 percent, due to further expansion for schools combined
with a moderate increase for healthcare facilities. However, reduced
contracting is expected for courthouses, churches, amusement-related
projects and airport terminals.
· Manufacturing building
is expected to edge up 2 percent, as its extended four-year decline
reaches bottom in early 2002. This category will still be extremely
weak by historical standards, down 35 percent in dollar terms from
its most recent peak in 1997.
Limited space is still available for the 2001 Construction Summit.
Executives interested in registering can call Chuck Pinyan at 212.904.4634
or e-mail him at cpinyan@mcgraw-hill.com.
Robert Murray is vice president, economic affairs for The McGraw-Hill
Companies Construction Information Group and has been with the company
since 1981. Mr. Murray is the author of the F.W. Dodge Construction
Outlook and also coordinates the five-year industry forecast, the
Construction Market Forecasting Service, which analyzes national
and regional trends for building products.
About McGraw-Hill Construction Information
Group
The Construction Information Group is the world's premier information
provider to the commercial construction industry. With its leading
brands F.W. Dodge, Sweet's, Engineering News-Record, Architectural
Record, and Design-Build, and the industry's most popular Internet
portal, construction.com, CIG provides the latest industry intelligence
and interactive solutions that enable construction professionals
to do their job faster, better and cheaper. CIG employs more than
1,700 professionals around the world.
About The McGraw-Hill Companies
Founded in 1888, The McGraw-Hill Companies is a global information
services provider meeting worldwide needs in financial services,
education and business-to-business information through leading brands
such as Standard & Poor's, BusinessWeek and McGraw-Hill Education.
The Corporation has more than 300 offices in 33 countries. Sales
in 2000 were $4.3 billion. Additional information is available at
http://www.mcgraw-hill.com.
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212.593.6389
John.Puccio@RFBinder.com
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RF Binder Partners
212.715.1547
Hanna.Decker@RFBinder.com
© 2001 The McGraw-Hill Companies - All Rights
Reserved
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