$277.7 Billion Market
Will We Make It? Come on Team, I Know You Can Do It!

I’ve been accused of sounding like an annoying cheerleader for the Western economic picture. I was constantly looking toward the bright light at the end of the tunnel that some others were convinced was an oncoming train. What I said was a dip in the road to financial success, some told me was a gully. (Our editor in charge of insipid metaphors told me that was enough for this column). Well, if the events of the past couple months are any indication, it looks like we’ve turned the economic corner and there’s no train in the tunnel, just daylight ahead (had to sneak one more in).

Since you’re in the building industry, what lies ahead in the West for 2010 is probably on your mind. Well we don’t have a crystal ball, but we’ve seen some forecasts by financial analysts and institutions. They all seem to be in agreement, that the residential market is turning around, and in turn, so should the rest of the economy.

Nearly every contractor I’ve talked to lately is busy. Some even have backlogs. There are a lot of bids being made and the distributors volume is up. Housing starts seem to have turned around. Interest rates are holding steady. Even the Construction Stats report, by McGraw-Hill, in this issue (see page 36) shows positive growth for single-family housing. This report has been pessimistic lately since it averages the entire nation and it includes not only single-family and commercial building, but also multi-family housing and non-building construction.

The National Association of Home Builders, who keeps a close eye on the residential building market, says, “the bottom for single-family construction was reached in January/February 2009 when starts hit a seasonally adjusted annual rate of 357,000, their slowest pace since reliable records started being kept in 1959.” NAHB’s economists are predicting that single-family construction will lead housing’s recovery with a 37.7% increase in single-family residential starts in 2010.

As another indicator, the Construction Outlook: Fourth Quarter 2009 Report, recently released by FMI, states that 2009 marked the bottom of the housing market in terms of percentage of decline. And, on a better note, FMI is predicting the residential construction market to total $277.7 billion in 2010. Now, I know this may seem like an ambitious statement, but we still have three quarters of 2010 to go. It’s good to have goals, and I think we can make it.

With new construction down so very far last year, much of the slack was taken up by smaller remodeling, retrofit, and reroofing jobs. Now it looks like we may see more new construction coming in the months ahead.

Marcus Dodson

editor