ABC Predicting End to Recession for 2011

Nancy Anderson
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Associated Builders and Contractors, Inc. (ABC) released their 2011 Construction Forecast, and the watchword would be, I suppose, “cautious optimism”. Nonresidential construction has been steadily in decline since 2007, and 2011 looks to be the first year without significant additional losses.

The report predicts only a 0.1% decline in spending overall for nonresidential projects in the coming year. They are looking forward to what they’re calling “grudgingly slow” progress forward, but the worst of the recession appears to be in the past. For the most part, the nonresidential sector’s recovery, such as it is, is due largely in part to sectors that are closest to the federal government’s recovery funding programs passed since January of 2009. Mainly, large infrastructure projects are starting to come online, and the sewage and waste, transportation, roads and highways, water supply, and conservation sectors are the ones benefiting directly from the programs. Other nonresidential sectors, however, such as commercial and manufacturing buildings, have yet to see a corresponding uptick.

With the roughly flat outlook for 2011 spending, ABC doesn’t expect the construction job market to recover until 2012. Residential housing construction, however, is forecast to pick up, with a projected 25% expansion in this market. Like many other reports, the major contributing factor is lack of capital, lack of access to financing and capital funding to grow inventories, and roadblocks to legislation and tax reform that would help the faltering industry.

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Mike Wrightly is mostly diesel fumes and duct tape; he grew up around heavy equipment, and holds a Bachelor's degree in Mechanical Engineering.

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