February 1, 2010

December Construction Starts Decline

The value of construction starts sagged in December after a relatively strong November resulting in a 14.6% decline for the full year compared to 2008. The weak December was primarily the result of a 20% month-to-month fall in non-residential building starts. Heavy starts were steady and residential starts were down slightly due to the brief delay in extending the homebuyer tax credit. Unseasonably bad weather contributed to the December decline in starts as it did to the large rise in construction worker layoffs recently reported.

Reed Construction Data expects residential starts to progressively expand in 2010, increasing as much as 50% from 2009. Initially, the gain will be entirely in single-family housing. Heavy construction starts are expected to sag significantly. The impact of stimulus funds is already ebbing.