Kermit Baker, chief economist for the American Institute of Architects, says the residential construction industry is “approaching the bottom.” These comments were made during a webinar held on April 16 in which other leading economists offered insights concerning the current economy as it relates to the construction market.Baker added that the industry is starting to see some favorable signs emerging. This includes the fact that for younger households priced out of the housing market previously, housing has suddenly become very affordable.

He adds that low mortgage rates are helping increase home sales as well.

“Third, home sales are bouncing around, and this is usually the first sign that we’re nearing bottom,” says Baker. “Finally, the markets that were the first to see the downturn are starting to see more sales activity.”

Baker added that once a recession ends, housing usually recovers pretty quickly.

The other speakers, who spoke more about the commercial side of the market, included Jim Haughey from Reed Construction Data and Ken Simonson, Chief Economist, Associated General Contractors (AGC) of America. They did say however that the U.S. economy is beginning to pick up, due in part to the stimulus package.

Simonson said that the AGC is trying to get members to tell them when they get projects, if they’re hiring people, etc., so they can gauge where stimulus is working, and if it’s not they’ll go to the president to see if further action is needed.

One area where the stimulus package seems to be having some effect is on the remodeling side due to incentives such as the purchase of energy-efficient windows.

Baker definitely offered the industry some hope for the future.

“When the housing market recovers from this down turn we should start to see some good solid numbers in the building industry,” he said.

On the non-residential side, Haughey said that although there is a decline in the non-residential market it will be less severe than what we’ve seen in the housing market.

“The non-residential market will come back faster than housing market,” said Haughey.

Simonson added that non-residential spending will be down between three-nine percent even with the stimulus money.

“For 2010, non-residential could be down again-at best break even,” said Simonson.


Leave a Reply

Your email address will not be published. Required fields are marked *