Construction Informer

I don’t think I saw any headlines heralding the new milestone in the home construction sector. For the first time in 48 years the number of housing permits issued in a given month hit a low of 616,000. The previously closest low was in March of 1975 when it was 709,000.

Depending upon your view this could be good news, or bad news. It’s good if you consider that number means we’re that much closer to the bottom. It’s bad if you consider the rest of the economy to be in such a mess that this number represents a new high relative to things to come.

Between the construction “fear”casts, and the construction horror headlines there are few places to run for cover. I read where the Michigan builders are now looking for federal help and right below that a headline announced a “painful” 2009 for construction. California is putting construction projects on hold because of the state’s deficit and GM just delayed the construction of a plant that was going to build an alternative fuel vehicle, the Chevy Volt.

But all was not gloom. Volkswagen announced it is about to begin construction on a paint facility for its Chattanooga plant. Meanwhile Washington state says it’s going ahead with a $16 million highway project in the spring. Perhaps in a month or so, we’ll be seeing more headlines like that.

The Associated Builders and Contractors (ABC) recently got out the old crystal ball, dusted it off and peered into it looking for clues as to what would happen in 2009 for construction. Interestingly, and as reported here previously, much could hinge on what legislative efforts come to fruition in relation to infrastructure.

ABC says an infrastructure stimulus package could address both the issues of short term economic weakness and longer term competitive needs. On top of that, since construction input prices are falling there is the opportunity to get more bang for the proverbial buck.

As for the rest of the construction segments ABC sees a dismal picture with commercial building loosing 10 to 20 percent in dollar terms compared to 2008, lodging construction off by 20 percent, office construction down by 15 to 25 percent, and hospitals, prisons and schools down by five percent. One bright spot appears to be in alternative energy, provided the government supplies the encouragement.

The report also showed the changes in construction employment from 2007 through 2008 YTD. Nonresidential lost almost 4 percent of its workforce and residential lost a little more than 11 percent.