A recent report by the Census Bureau showed that spending on commercial construction projects -- hotels, office buildings, hospitals and other nonresidential construction -- was running at a seasonally adjusted annual rate of $671 billion in December. That was essentially flat with November and brings to an end 14 consecutive months of growth in spending on commercial construction.
Economists say the latest numbers reinforce concerns that the commercial building boom, exemplified by lines of construction cranes clogging cities all across the U.S., is coming to an end. "Even if we avoid a recession, nonresidential construction will go negative this year," says Edward Sullivan, chief economist of the Portland Cement Association, a North American trade group. "If there's a recession, it will go even more negative."
Already, a handful of projects have been stalled or canceled. In October, Chicago-based mall developer General Growth Properties dropped plans for a one-million-square-foot regional shopping center in Oconomowoc, Wis., a Milwaukee suburb. In Detroit, General Growth has pushed back the construction of the Shoppes at Gateway Park, a 330,000-square-foot open-air mall.