US construction industry to bounce back in 2010

Recovery could be in sight for the US construction industry.

A report from McGraw-Hill Construction has painted a cheerier picture for the US construction industry which has been in virtual freefall for the past three years.

According to the 2010 Construction Outlook, the US will see as increase in overall construction starts next year, driven by low level housing and the expansion of public works.

“The U.S. construction market in 2010 will be helped by growth for several sectors, following three straight years of decline that brought total construction activity down 39% from its mid-decade peak,” McGraw-Hill Construction VP of economic affairs Robert A. Murray last week told more than 300 industry professionals at the Outlook 2010 Executive Conference in Washington.

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The level of construction starts is expected to increase by 11% to US $466.2 billion after a 25% decline which is expected for 2009.

“The benefits from the stimulus act will broaden in scope, lifting not just highway construction but also environmental public works and several institutional structure types. With continued improvement expected for single family housing, after reaching bottom earlier this year, the overall level of construction activity should see moderate expansion in 2010,” added Murray.

However, the 2010 Outlook forecasts a 4% dollar drop in commercial buildings – still positive in light of 2009’s 43% drop.

“The stimulus funds are meant to be just that, a stimulus, not the be-all-end-all answer to infrastructure financing,” said Hill International senior VP Frank Giunta.

“Both public and private sectors need to be innovative and rewrite the rules of project finance to address tremendous construction needs with minimal financing options.”

George Pierson, COO for Parsons Brinckerhoff added: “The efforts of the federal agencies at transparency and their willingness to engage with private industry is refreshing. We have to work together to meet the challenges of infrastructure and this economy.”