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FOGGY FUTURE FORECAST

Dallas-Ft. Worth
FOGGY FUTURE FORECAST
McGraw-Hill Construction hosted industry forecasts  at the Marriott in Las Colinas and the Aonn Center in Chicago last week (hat tip to our Windy City office for covering). Here's its economist Bob Murray, who offered less dire predictions for DFW than the Windy City.
 
McGraw-Hill economist Bob Murray

Less dire, yes, but out of habit we'll start with the bad news. In Texas, Bob says, deterioration of the state’s fiscal health will be a big issue, as sales tax revenues are down. Numbers show a mixed picture that the corner is being turned, but it’s not enough traction that recovery is certain. He says that won't happen this year. Commercial building starts were down 55%  from 2008 to 2009. Yet, some bright spots include the $300 million Dallas Convention Center Hotel project that started this year.

McGraw-Hill economist Jennifer Coskren

McGraw-Hill economist Jennifer Coskren says Texas commercial construction was the poster child for a very bad 2009. She’s not expecting a repeat of the 80s (though we just read that Pee-wee Herman is making a comeback, so, let's check our facts), but property values, rents, and vacancies are not expected to make a comeback until 2011, at the earliest. Office was hit hardest, with construction sliding and Dallas vacancy creeping up to 22%.

FOGGY FUTURE FORECAST

More points a la Jennifer:

  • Infrastructure looks to remain strong: Projects from the Recovery Act and the state’s Proposition 12 bond funding, plus projects from the public/private North Tarrant Express, will get started this year. 
  • Recovery is not going to be uniform: Housing will recover, while multifamily doesn’t look good. Forget about commercial construction in '10 and don’t count on manufacturing either. 
  • Place your bets on education and healthcare. Expect a healthcare increase in 2010, as the new Parkland Hospital gets underway. A few hours south, Fort Hood will replace its hospital this year, too.