An update on economic issues impacting the construction industry shows there is hope on the horizon.
The combination of lower interest rates, a Federal Reserve Board chairman who indicated a willingness to make further reductions and tax rebate checks should have provided a lift to the U.S. economy in the second half of 2001. Unfortunately, the attacks and the subsequent war on terrorism have postponed that lift. We estimate negative growth from the fourth quarter of 2001 through much of 2002, slowly rising to an economic recovery later this year. Significant disruption of certain sectors, such as commercial office space in geographic markets driven by technology construction, will be felt for the next 12 to 18 months. New industrial construction is experiencing unbalanced supply and demand in several regions. We project that travel-related sectors such as hotel and motel construction will slip in 2002 yet rebound in 2003.