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The general mood of the economists and other presenters at the 2014 Dodge Construction Outlook, held Oct. 24-25 in Washington, D.C., can best be summarized by the earworm lyric for the 1970s hit song from the Little River Band - "Hang on/Help is on its way."
While the construction market will probably maintain its slow, methodical pace to recovery in the short term, some macroeconomic drivers could push the market to much better growth over the next decade. McGraw-Hill Construction says spending related to total U.S. construction starts for 2014 will rise 9% to $555.3 billion, higher than the 5% increase to $508 billion estimated for 2013. That forecast will vary on a region-by-region basis. Some metropolitan areas, including Washington, D.C., Boston, New York and the San Francisco Bay Area, are already enjoying marked improvement from the depths of the Great Recession, while others may not see a major rebound over the next few years.
Two of the economists on the program, Robert Murray, McGraw Hill Construction's V.P. of economic affairs, and Beth Ann Bovino, chief U.S. economist for Standard & Poor's, both expect the oil-shale boom to continue to drive long-term economic growth by offering less-expensive energy that the United States can export offshore and use to lure manufacturing back to this country. Murray told the 200-plus attendees at the conference that he expects "modest growth" in the 2014 construction market and not a boom. Some key contributing factors to his forecast include fiscal restraint on the federal spending level; more bond issues passing on the state and local level to fund construction of schools and other public facilities; the increasing office employment and declining office vacancy rates in some key downtown markets; and a positive picture for the housing market. He did caution attendees...