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What's new in Northeast Ohio construction 2010?
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2010 promises to be another challenging year for contractors, especially those in Northeast Ohio. It seems that Summit and the surrounding counties have been particularly hard hit by this recession. But there is a ray of hope. According to the Associated Builders and Contractors, the nation's construction industry, nearly paralyzed during the downturn, should see modest gains this year as a rise in building of single-family houses, apartment buildings, and highways and bridges offsets drops in commercial and manufacturing property. This should also be a great year for owners to build. It appears that there will continue to be a surplus of contractors, especially in Summit, Medina and Wayne Counties, all eager to bid on the work that is available.
So far, all the indicators say materials will be fairly stable in cost, but the labor costs will be extremely low. In fact, one of the more positive aspects for contractors has been declining construction materials prices. Relative to prior years, materials prices have been stable, permitting contractors to submit bids on long-term projects with greater confidence. As a result, owners may be surprised how economical their projects could be in 2010.
Hopefully, some of the stimulus money will find its way to NE Ohio and the work will start to put bigger contractors back to work on the larger projects. Residential and nonresidential building stimulus projects are estimated to total as much as $35 to $40 billion over the next two years. This could be a real boost for Ohio communities. For a $400 billion a year sector, spending at this level will help, but likely won’t have a direct impact on the private side of the market. The result may be that the big contractors will vacate the smaller size work arena, thereby helping all segments of the construction industry. That would be great news for the Ohio construction industry.
The banks in Northeast Ohio are indicating that the lending market will continue to see challenges in 2010. Most banks are expected to discontinue offering commercial real estate lines of credit, insisting that each and every project stand on its own merit. However, those loans that are made should be at relatively low interest rates. Creative financing will hold the key to success in 2010.
How all of these varied influences play out over the next year will determine the type of recovery that can be expected for the construction industry. For now, we need to remain hopeful and watchful for signs of recovery and new projects for all segments of the industry.
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