Credit loosening up some?
In a recent McGraw-Hill Construction survey, 13 percent of those surveyed said project financing was getting easier to obtain, up from 7.2 percent in the first quarter. However, 39 percent of those surveyed said project financing is harder to obtain, versus 50.7 percent in the first quarter. The survey polled about 2,000 U.S.-based contractors and engineers.
The industry is worried about inflationary pressures once the market turns around, according to the survey, but half of respondents said they have seen little or no upward pressure on prices.
When assessing the construction market, 53 percent of respondents said the current construction market is still in decline, 36 percent said it had stabilized, and 11 percent said it was improving. However, survey respondents expect the picture to be different in 12 to 18 months, with 50 percent believing the construction market will improve and another 39 percent believing it will stabilize in 2011.
In his presentation, "2010 Outlook for U.S. Construction Activity – Midyear Update," on June 16 in Arlington, Va., Robert Murray, vice president, Economic Affairs, McGraw-Hill Construction, said, “As far as cost of financing, now and until the end of this year is a great time to go ahead with construction projects.” Tighter lending standards are still a major constraint for 2010, he said. A survey of bank lending officers shows a loosening of lending standards in the commercial and industrial sectors, but it is not visible yet in the commercial real estate sector. The short-term rates are still low and will remain low until the end of this year, he said.
What are you experiencing in the lending market?
—By Sahely Mukerji, senior editor, Glass Magazine