The construction industry forecasts will rebound in 2010

The closely watched McGraw-Hill construction forecast released Friday is another indicator that the economy will remain choppy in the wake of the longest and steepest recession since the Great Depression. New development will continue to be dragged down by high unemployment and tight credit markets. The nation's construction industry, nearly paralyzed during the downturn, should see modest gains next year, as a rise in building of single-family houses, apartment buildings, and highways and bridges offsets drops in commercial and manufacturing property, according to a new report. Next year, starts are expected to climb 11% to $466.2 billion, according to McGraw-Hill. Construction starts indicate future construction spending and often correlate strongly with actual spending. This year was particularly tough for the construction industry, with the value of starts expected to plunge 25% to $419 billion. Single-family housing should come in at $162.2 billion, a 30% boost to 560,000 units, provided that mortgage rates remain low, the $8,000 tax credit for first-time home buyers is extended and programs to ease the foreclosure crisis help homeowners, the survey states.