Building of one and two-family houses is expected to decline next year, although more apartments will go up, according to the annual Dodge Report on construction.

The value of contracts as a whole is expected to rise about 8 per cent to $147 billion in 1978.

George A. Christie, chief economist of the McGraw-Hill Information Systems Co., told the annual conference of the Building Products Executives here last week that the biggest gains would be in manufacturing buildings, provided the "long-awaited expansion of business capital spending finally talkes hold." The latest Commerce Department survey on business investment intentions show investment is likely to grow by a moderate 8.1 per cent in 1978.

Unless excessive credit restraints or a serious economic slowdown intervence. Christie said he foresees contracting for commerical and industrial building jumping as much as 20 per cent in the new year. He called non-building construction - highways, sewers, etc. - a "volatile category" and said much of the growth in this area depends on an increase in multi-billion dollar electric utility projects.

The contract value of new houses, which rose from $36.5 billion in 1976 to an estimated $48.8 billion this year, is expected to decline a fraction to $48.6 billion. Allowing for inflation, this means a decrease of 6 per cent in the actual number of units, from 1.33 million to 1.25 million next year.

The predicted number of total units will remain unchanged at 1.9 million in 1978, with the frowht being in apartments. Christie said he sees these rising 16 per cent, to 550 million units, up from 475 million. Contract value will go up 20 per cent to $11.7 billion.

The strongest gain in commercial construction is expected to be in manufacturing plants, up 30 per cent to $6.3 billion. The value of office buildings is seen rising by 15 per cent, and stores and other commerical space, 17 per cent. The total value of nonresidential building is expected to rise 15 per cent in 1978 to $38.5 billion.

Christie said that round two of the Public Works Employment Act, which invloves some $4 billion, can be expected to push the contract value of sewer and water facilities up 13 per cent, highways and briges up 11 per cent, and utilities up 9 per cent.The total value of nonbuilding construction is put at $46.9 billion.

Construction in the Northeast, which includes the Washington area, is seen rising 8 per cent next year. The strongest gains, 15 per cent, will be realized by the Midwest, and smallest, 3 per cent, by the South.