Revenue in the U.S. construction business will surge 19 per cent this year over 1976's total to $127.5 billion, an industry survey predicts.
McGraw-Hill Information Systems Co., a leading chronicler of trends in the construction industry, said the gain will surpass its earlier forecast of a 15 per cent increase over 1976. Last year, construction contract value totaled $107.158 billion.
And the outlook for next year is encouraging as well, McGraw-Hill said.
The large backlog of mortgage commitments at thrift institutions and the new leadership at the Department of Housing and Urban Development are "two good reasons to expect a high plateau of housing activity for the remainder of 1977, and 1978 as well," said George A. Christie, the firm's chief economist.
Housing starts are expected to total 1.75 million units this year, consisting of 1.3 million one- and two-family houses and 475,000 apartment units.
While institutional building activity looks "a bit weaker than earlier expectations," commercial construction is looking up, Christie said. "The second half of 1977 should bring an acceleration in the rate of contracting for manufacturing buildings," he added.
Residential construction contracts this year should total $56.5 billion, 29 per cent ahead of last year's $43.65 billion.
Commercial and manufacturing construction should amount to $17.1 billion, an 18 per cent gain over 1976's $14.5 billion.
Educational, health and other institutional construction should total $16.7 billion, up 7 per cent from $15.5 billion in 1976.
Nonbuilding construction such as highways, bridges, sewer and water projects, should total $37.2 billion, 11 per cent ahead of $33.5 billion in 1976.
Christie also reported that the severe winter weather had impaired first-quarter profits of many building of 60 building materials manufacturers representing 14 product groups dropped 4 per cent in the first three months of this year.
"Building material manufacturers are relatively intensive users of energy and were hard hit by last winter's fuel shortages," he said. "In particular, firms with plants in the Midwest and Northeast, such as steel and gypsum, faced abnormally increased fuel and operating costs . . ."