Volume 47, Issue 1 - January/February 2008
Looking to the Non-residential Market
Those who may be feeling pinched by a slower residential market, may consider looking to non-residential products to smooth things out. This may prove to be a sound strategy, because recent research indicates the non-residential sector will hold up until the residential market begins to rebound.
FMI, a Raleigh, N.C.-based group of management consultants and investment bankers to the construction industry, recently released its Construction Outlook: Fourth Quarter 2007. The group’s outlook for construction in 2008 has been revised slightly downward since the third quarter, but certain segments, such as non-residential construction, are expected to remain strong. In fact, FMI’s quarterly construction market forecast, developed by its Research Services Group, notes it is not predicting a national recession or a downturn in non-residential construction for 2008.
FMI says non-residential construction boomed in 2007 and will increase again in 2008, but at a slower rate. According to the report, this segment is expected to expand at a 5 percent rate in 2008 and a 4 percent rate in 2009. FMI’s report also says the housing correction is not expected to begin recovering until 2009.
“There are several drags on the economy, such as housing and credit tightening,” explains Heather Jones, construction economist for FMI’s Research Services. “However, resilient consumers, businesses and exports have so far been able to prop it up.”
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