As a rule of thumb, forecasts tend to err on the side of optimism. When a consensus forecast is flat, warning flags should go up. ENR's interviews with construction economists uncovered, at best, guarded optimism. More commonly, economists expressed degrees of pessimism, ranging from a stalled recovery that could bounce back by 2013 to a double-dip recession that could cloud numbers for the foreseeable future. But no one is too happy about 2012.

McGraw-Hill Construction's forecast for 2012 sees zero growth for construction starts following five years of depressed markets. MHC, the parent of ENR, estimates that 2011 will close out with a 4% drop, to $410 billion, in total construction starts. In 2012, starts are expected to inch up to only $412 billion, says MHC's chief economist, Robert Murray. Given the economy's current fragile condition, an overall recovery may not come until 2013 or 2014, he says. "It's going to be another year on this extended bottom. The corner is being turned, but very slowly and in an uncertain manner," Murray says.

The Portland Cement Association, Skokie, Ill., is also growing more pessimistic in its outlook for 2012. Last summer, the PCA was looking for total construction put-in-place to increase 1.9% next year, following declines of 4.9% in 2011, 7.3% in 2010 and 14.2% in 2009. But even that modest increase now seems in doubt, says PCA's chief economist, Ed Sullivan.

"The whole thing that drives the recovery is job growth, and that is not happening," says Sullivan. "We are downgrading our outlook. Next year will be absolutely flat, and real growth may not appear until after 2013." The PCA forecast was not available by ENR press time, but it is expected to be released by the end of this month.

The U.S. Dept. of Commerce has discontinued its forecast for construction markets, but its data for actual construction put-in-place through last September were not promising. Through the first three quarters, total construction put-in-place was down 3.5% from 2010, according to Commerce. In turn, 2010 was down 10.3% from the year before.

The American Road & Transportation Builders Association, Washington, D.C., is predicting a 6% decline in 2012 for the construction activity it tracks. "Federal stimulus funding is running out, and we don't expect much of a boost from any highway spending bill that Congress may pass," says Alison Black, ARTBA's senior economist. She predicts that, next year, most of the decline in transportation will affect paving work, and bridge construction will be down slightly.

One relatively optimistic forecast for 2012 comes from FMI Corp., Raleigh, N.C. It expects total construction put-in-place to be up 2% this year and increase another 6% next year. "But if you take inflation out of our numbers, we would be looking at a decline in 2011 and a pretty flat market in 2012," says FMI's chief economist, Randy Giggard. "We see a stronger recovery going into 2013, but 2012 will continue to bounce along," he says. FMI data received a boost by including home improvements, which were up 13% this year, to $134 billion.

Residential construction kicked off the current recession in construction when the housing bubble burst in 2007-08. Since then, new single-family housing starts have been stuck at around 450,000 units. This year, housing defied predictions of a modest rebound and declined even further. The National Association of Home Builders, Washington, D.C., had predicted single-family housing would rebound 33% this year; instead, the sector declined another 10%, to 422,000 units.

But NAHB thinks enough is enough. Once again, the group is calling for a modest rebound in single-family housing starts, forecasting a 17% increase in 2012 and a 46% increase in 2013. "Just like the housing bubble was not sustainable, the housing bust is not sustainable, either," says Robert Denk, an NAHB economist.

"Current housing starts are not much above what we consider as just maintaining the housing stock," says Denk. NAHB's replacement-level estimate is pegged at about 350,000 units a year. In addition, NAHB says, demographic trends suggest the economy should be producing 1.4 million units a year to meet demand. "That's a big gap, and eventually something has to give," says Dent. "We are talking a million units below a normal, sustainable level," he says, adding, "Just how long can you live with your parents?"