Construction starts have rebounded since the low of last June. Nevertheless, monthly construction spending has dropped nearly 20% in the last 18 months.  The amount of construction in progress was reduced by the steep drop in starts during early 2009  but is now but is now starting to pick up  so very little further drop in jobsite activity is expected. Monthly construction spending is expected to begin rising again soon.

Commercial market indicators measuring current activity, such as occupancy and rent, are negative while longe term indicators, such as starts and cost of credit are positive. An upturn in monthly construction spending for  projects which will progressively strengthen late in 2010 and through 2011.  Some of the spending increase expected later this year will be the resumption of previously suspended projects.

The economic environment for governmental construction is now weakening after holding up through the recession.  Cash strapped local and state governments have had  to cut spending and have often done so by postponing building maintenance or expansion. The federal government has shifted its focus away from creating more jobs by building buildings to other means of job creation. The President’s proposed 2011 budget includes a small reduction in building construction funding.

Tagged with:

Filed under: Construction

Like this post? Subscribe to my RSS feed and get loads more!