Total inflation-adjusted construction activity, already at a record high and likely to rack up a 1.3- percent increase this year, will dip 1.9 percent in 2001, then continue its upward track, rising by 1.3 percent in 2002. This forecast was presented by Bill Toal, chief economist for the Portland Cement Association, who addressed a National Press Club at CMD Group’s annual North American Construction Forecast in October.

The construction economy is benefiting from the strength of the overall economy, which will rise 3 to 3.5 percent in 2001, Toal said.

“With the technology bursts we are getting, unless something really broadsides us, I see continued economic growth at a moderate pace as far as the eye can see,” he said. “Spending on information processing equipment and software has gone from literally nothing in the 1970s, to about 2 percent of GDP in the early ’90s, and now is hitting 6 percent of GDP. As a result, labor productivity, stuck at a sluggish 1-percent growth rate for years, is rising at 4 to 5 percent a year. The gains have translated to slowing unit labor costs, which have actually declined over the past year. As a result, inflation has remained low despite 115 months of unprecedented expansion.”

This information has been supplied by the CMD Group.