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MACAPA Focuses On 2007 Outlook

More than 60 members of the Massachusetts Concrete & Aggregate Producers Association (MACAPA) heard the latest construction outlook for the upcoming year from the chief economist of Reed Construction Data (RCD) at the group's annual membership meeting. Jim Haughey, Ph.D., director of RCD's Research and Analytics Department, presented his 2007 forecast for residential and nonresidential cons...

February 26, 2007

More than 60 members of the Massachusetts Concrete & Aggregate Producers Association (MACAPA) heard the latest construction outlook for the upcoming year from the chief economist of Reed Construction Data (RCD) at the group's annual membership meeting.

Jim Haughey, Ph.D., director of RCD's Research and Analytics Department, presented his 2007 forecast for residential and nonresidential construction on January 16 at Ken's Steak House in Framingham, Mass. Haughey, a frequent speaker on construction outlook at events sponsored by trade associations and industry materials and equipment suppliers, is responsible for detailed market forecasts for RCD magazines including those of the Associated Construction Publications (ACP), a group of 14 regional business-to-business construction magazines that includes New England Construction.

As part of the meeting, an award was presented to Art Stenberg, the association's retiring executive director, by Shawn Legein, the new executive director.

MACAPA, headquartered in Attleboro, Mass., represents individuals, firms and corporations engaged in production and marketing of ready-mixed concrete. The association also includes associate members who manufacture or sell equipment and materials or provide services used in the ready-mixed concrete industry. Other members are contractors and consultants involved in the industry.

Haughey's presentation to this group indicated that the predicted slowdown in economic activity would be earlier and smaller for New England than that seen for the nation as a whole. He pointed out that there would be 30,000 new construction jobs in 2007 — compared to 39,000 in 2006 — and that although the nonresidential building and heavy construction market wage rate gains have lagged the economy, they will accelerate in 2007.

Concerning interest rates that have a strong impact on construction activity, Haughey said he expected them to be steady in 2007, including 30-year fixed mortgage rates that should rise no more than 0.2 percent over the year, settling at 6.4 percent by December.

In comments following the meeting, Haughey said that attendees all noticed some slowing in activity from June to November 2006, and then a pickup, perhaps due to warm weather, in December.

"Several ready-mix operators said that they did not need any more leads now. And some said that private college construction is what is keeping their market strong. Not many of the audience were looking for paving contracts so the funding delays in highways and airports did not concern them.

"Their key concerns," he concluded, "were that the solid New England market might cause new capacity to be built here by someone outside the region, or that the Chinese would again dump cement on the world market and depress their margins."

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