Doom in building sector to continue in 2009

How will the US economy especially the construction industry behave in 2009? It is being largely assumed that there shall be the recurrence of 2008, while others forecast it may be worse. Nothing can be said definitely in this respect at the moment. However, if we follow the construction industry economists, we ought to conclude that a difficult year is waiting for us where only a few numbers of building along with higher vacancy rates and rising unemployment will reign supreme. Will there be any respite ever? Well, according to the economists, everything depends on the federal stimulus dollars and its enactment.

Both of Jim Haughey and Ken Simonson, Chief Economist for Reed Construction Data in Georgia and Chief Economist for the Associated General Contractors of America, respectively, have reached this conclusion. It is likely, as stated by Jim Haughey, that the U.S. economy will hit bottom in late summer or early fall and there is hardly any possibility that it will recover before the end of 2010. What’s more, the following years of the restoration will witness a controlled growth. The situation is, without a doubt, quite desolate.

Nevertheless, a lot of expectation is there, regarding the stimulus package of President Barack Obama that calls for $134.5 billion of new construction funds through 2010. This includes $77 billion for civil construction and $43 billion for non-residential construction. What is the reading of Haughey in this regard? Jim assumes nearly $15 billion would be spent this year and as a result there shall be a 2 percent enhancement in non-residential construction spending.

Ken Simonson, as already said, hardly differed on any aspect, and stated categorically that there shall be a reduction of 3 to 9 percent in nonresidential construction spending whereas the retail sector will come to the prominence than ever before. Will this further recession affect the job sector? Though both declined to say something in this regard, Haughey pointed out that there is a strong expectation that hotel vacancy rates may reach 41 percent, office vacancy rates may obatin19 percent and retail vacancies to reach 17 percent which aggravate the respective sector than 2008.

Any sane individual can understand the gloomy effects on the job sector from these.