According to Bill Toal, chief economist for the Portland Cement Association, the U.S. construction industry can expect an overall decline of 6.3% in activity next year due to the economic downturn. Still, he pointed out that "by historical contrast, this would put construction spending back to slightly above 1998 levels, which were record levels of activity."
"We expect a 10% decline in private, nonresidential construction spending next year after a 5.4% drop this year," Toal said. However, he said this sector should begin recovering by the end of 2002 and experience a 3.5% increase in 2003. "The weaker areas of non-residential construction are hotels, industrial, office and retail," Toal said. "The technology sectors, which fell about 20% in growth in the first two quarters of 2001, will hold down the office markets. Office vacancies, for example, had been predicted to rise to about 10% by the end of this year, but we may see a greater rise in vacancies going into next year."