The news is mainly good on the residential side of the construction industry that is currently weathering its worst cycle in decades.
Unfortunately, the commercial contractors are still having a hard time finding work. And while industry leaders see some optimistic signs, the outlook remains guarded at best.
Homebuilders are starting to see some sunlight. And, Oxford-based mortgage technology company FNC reported in February that the housing market’s rebound from the 2008 crash looks to have staying power.
The firm’s national Foreclosure Market Report released last month showed foreclosure prices have bottomed out in recent months and the foreclosure market has stabilized while underlying home values are rising.
“The fact that we are seeing a combination of rising home prices and a bottoming out of foreclosure prices is a very good sign the housing recovery is taking hold,” said FNC senior research economist Dr. Yanling Mayer in a statement. “This is the very first time in the long housing recession that the two are happening at the same time.”
Ironically, FNC only had to look in its own backyard to see some positives in residential construction. In January, the City of Oxford reported building permits for single-family homes tripled last year— from 61 permits in 2011 to 224 permits in 2012.
In the Feb. 15 edition of the MBJ, Marty Milstead, executive vice president of the Homebuilders Association of Mississippi, said “there is no question that things are moving back in a positive direction. Things are not moving at a sprinter’s pace. But it is positive to have the needle moving in the right direction.”
Meanwhile, commercial builders are seeing little positive movement at all. It might be the end of the year before that changes, too.
A report from the national Associated Builders and Contractors released last month showed the ABC’s Construction Backlog Indicator (CBI) remained unchanged at eight months from the third quarter through the fourth quarter of 2012.
“CBI failed to rise during the fourth quarter of last year, a reflection of numerous factors, including fiscal cliff fears, highly constrained public capital budgets and lackluster macroeconomic growth,” said ABC chief economist Anirban Basu. “However, backlog did not decline, suggesting that nonresidential construction spending is likely to remain flat during the initial months of 2013 and then possibly trend higher during the latter part of the year.