Construction Outlays Skid During Year : Survey: The 11% drop from 1989 pointed to a ‘deepening decline’ at year-end, according to F. W. Dodge.

From United Press International

Domestic construction contracts last year were valued at $239.97 billion, 11% lower than the $270.65 billion recorded in 1989, according to an industry survey released Monday.

The results pointed to a “deepening decline” at the end of 1990 in construction contracting, said F. W. Dodge, a division of McGraw-Hill Inc. that compiles information on the construction industry.

Calculated on a seasonally adjusted annual basis, the monthly value of contracts for newly started construction projects for December also fell 11%, to $204.37 billion from $229.26 billion in December, 1989, F. W. Dodge said.

The 1990 downturn, the first in seven years of continuing expansion, came after the construction industry achieved a record high level of contract values in 1989 and reflected weakness in both housing and non-residential building. But “non-building” construction--public works and utility projects--held virtually even with 1989’s value, F. W. Dodge said.


“The 1990 annual total of construction contract value was still a respectable number by some standards, but it masks the extent of the construction market’s deterioration since this time last year,” said George A. Christie, vice president and chief economist for F. W. Dodge.

He noted that the Dodge index for December stood at 130, down 26% from the 176 a year earlier and also down from November’s 146. The index measures the seasonally adjusted value of construction contracts against a 1982 base of 100.

“Even more disturbing is that, after adjustment for inflation, the volume of construction being started in recent months barely matches the level that prevailed during the industry’s deep recession of 1980-82,” Christie said.

Weakness in construction contracting was noted in all regions of the country for the year as a whole.


Both the Northeast and the South Atlantic regions saw above-average decreases in contracting from 1989, followed by the South Central region. Smaller decreases were experienced in the West and North Central regions, F. W. Dodge said.

However, toward the end of last year, the West was showing the deepest geographical decrease, while the North Central region “remained relatively strong,” according to F. W. Dodge.