THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Monday, January 23, 1995 TAG: 9501210098
SECTION: BUSINESS WEEKLY PAGE: 18 EDITION: FINAL
SERIES: Forecast '95
SOURCE: By MYLENE MANGALINDAN, STAFF WRITER
LENGTH: Short : 36 lines
After living in the shadow of the Federal Reserve's successive interest rate hikes, the construction industry is watching divergent trends develop in 1995.
Builders and other industry watchers expect the rebound in commercial construction will continue while residential construction slows down due to the rise in interest rates and the lack of demand.
``We don't expect to see the sales based on the pent-up demand when rates dropped precipitously,'' said Michael D. Newsome, president of the Tidewater Builders Association.
``We're going to get back at a market of equilibrium where our quality can be more easily maintained and production levels can be more easily maintained,'' Newsome said.
Home building slowed down considerably last year after peaking locally in 1993, said economist Roy Pearson. Residential permits fell 4.8 percent in 1994 to 8,848, down from 9,292 in '93, reports show.
And according to John M. Whaley, director of economics of the Hampton Roads Planning District Commission, home construction will continue its slide, slowing about 15 percent this year.
In contrast, nonresidential construction started to rebound.
``We're reaching a point now when businesses are looking for new facilities, and feeling the need to expand,'' Pearson said. by CNB