The largest drop in energy costs in decades has to have an impact on construction costs and markets. But perhaps not as much as you may think. "The impact of the drop in oil prices will be limited to a few specific markets, such as petrochemical plants, and it will be very regional," says Robert Murray, chief economist for Dodge Data & Analytics. He still predicts that the dollar value of total construction starts will increase 9% to 10% this year. "The pull-back in manufacturing is dampening growth but not causing a decline," he says. However, the downturn in the manufacturing sector will be severe. "We had a surge in petrochemical work last year and expected a slowdown in 2015, but now we expect that slowdown to be even stronger due to the drop in oil prices," Murray says. That is also adding to the deferral of pipeline work. He predicts that, overall, the manufacturing sector will decline 25% this year. However, Murray points out that this downturn follows two very strong years of growth for the manufacturing market.
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