ECONOMIC OUTLOOK FOR 2004

The United States economy is still on a slow path to recovery from the 2001 recession, but it is recovering. Economic growth slowed in October through December of 2003; however, growth stepped up for the year as a whole, according to estimates of gross domestic product (GDP) released by the U.S. Bureau of Economic Analysis. In the fourth quarter, GDP increased at an inflation-adjusted annual rate of 4.0 percent after increasing 8.2 percent in the third quarter. GDP grew 3.1 percent for the year as a whole, and in 2002 it had only risen 2.2 percent.

In the construction sector of the economy, the industry continued to experience softness although the value of construction spending rose in 2003. According to the FMI Corporation's recently released report, The 2003-2004 U.S. Markets Construction Update, the outlook for 2004 is a positive one and the construction industry is on track for a stable recovery.

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The residential construction sector, which makes up 51 percent of the construction market, is projected to remain strong in 2004. Factors driving this activity could shift though, as the nation's record low mortgage rates slowly disappear, leading to a slight dip in put-in-place growth during 2004. Although the nonresidential sector did not perform well during 2003, FMI expects it to recover in mid-2004 as well.

Sources: U.S. Bureau of Economic Analysis and FMI Corporation.

Construction Put In Place Estimated For The United States (Millions of Current Dollars)
Construction Categories 2002 2003 2004
Single-Family Houses 265,889 284,501 276,196
Residential Improvements 123,071 136,977 137,830
Highways and Streets 54,851 53,732 58,146
Education-New 42,667 41,678 40,241
Utilities 47,096 41,151 41,560
Private Office and Professional-New 37,463 37,022 37,305
Multifamily Homes 32,561 31,910 30,953
Source: The 2003-2004 U.S. Markets Construction Update, FMI Corporation

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