Construction Spending Begins a Slow Build
Following steep declines last year, U.S. construction spending is projected to increase slightly in 2010, according to Fitch Ratings in a new report. In particular, U.S. public construction expenditures should continue exhibiting mild growth in 2010 thanks in part to federal stimulus spending. Residential construction spending should also mildly improve this year from depressed levels in 2009. However, ongoing pressure in the commercial real estate sector means spending on commercial projects will remain weak.
Private non-residential construction for the first two months of 2010 declined 24.7% compared to the same period last year. One of the biggest issues for commercial construction remains the availability of financing for new projects, according to Fitch Director Robert Rulla.
"The real estate losses suffered by many financial institutions have led to tighter credit standards, higher borrowing costs, and lower availability of credit," said Rulla. "This will likely remain so for the short term, which may lead to cancelled or postponed construction projects with no financing currently in place."
Among the positives to be gleaned for this year are the flow of stimulus funds to public construction that should offset expected spending cuts by state and local governments as they deal with lower revenues. In particular, highway spending should benefit from a pickup in activity resulting from projects being done under the Federal stimulus package.
Additional information is available at www.fitchratings.com.
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Thanks for sharing the resource, this is the kind of information any constructor could use this year it's important for all these people to preview the trend for their investments in 2010. I trust that the construction industry will revive in little time, I consider it one of those industries that works with it's own fuel.
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Thanks for your comment. We are constantly searching the news for indicators that the market is improving. Whatever is built will eventually wear out, so construction will always be a viable industry.
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