Anybody looking for green shoots in the economic recession won’t find many in a recent construction industry outlook report from the Associated General Contractors of America. 

Andy Shmina of AZ Shmina Inc. in Brighton recently outlined the forecast at a meeting of the Washtenaw Contractors Association, presenting data that shows how grim reality is for the industry right now, especially in Michigan.

Using statistics from AGC economist Ken Simonson, Shmina outlined trends including:

• An 8-percent spending reduction in private, non-residential construction between July 2008 and July 2009.

• A 28-percent drop in private residential construction during the same period.

• And a drop-off of 20 percent in construction industry employment in Michigan.

And he said the outlook for the near future is not better: “Flat-line is what I would be planning on for the next 12 months.”

Falling occupancy rates for office, retail and hotel uses, combined with a lack of financing access for a large portion of private development has resulted in a building standstill, Shmina said. Meanwhile, though, the municipal bond market is functioning well enough to finance publicly funded construction projects, Simonson’s report found.

“Private construction for private, non-owner-occupied building is dead in the water. There’s none going on in the country, and it’s even worse in Michigan,” Shmina said.

And even in the Ann Arbor area, he said, “vacancies are historically at the highest level in 10 years.”

Simonson’s report also outlined the amounts of money available for various types of construction from the federal stimulus package: $49 billion for transportation; up to $35 billion for various building projects including housing; $30 billion for energy and technology; and $21 billion for water and environmental projects.

But Shmina said the money for building projects in the stimulus won’t have as much impact in Michigan as in some other parts of the country because there are relatively few federal buildings and projects in the state.

“We’re getting some (of the stimulus money), but it’s not having a huge impact,” he said.

And the competition for publicly funded projects has increased, Shmina added, to the point that some contractors are factoring in zero profit margin to their bids, shooting for the contracts simply in order to keep some revenue flowing and employees working.

Simonson’s forecasts for the coming year nationally don’t offer much solace. He predicts non-residential construction spending will end the year down between 3 and 7 percent for 2009, and fall possibly another 5 percent in 2010. Total construction spending will end 2010 between a negative 4 percent and positive 2 percent range, Simonton predicted.

A bright spot for the country as a whole will be residential housing, which will end this year down up to 40 percent, but will grow between 5 and 10 percent next year, Simonson anticipates. That probably won’t translate to growth in Michigan, Shmina said, until a significant number of jobs are created.

The best chance for that, he added, is the entrepreneurial economy based around the state’s universities. Meanwhile, construction contractors’ best hopes is to shore up their balance sheets, pay down debts, and resize themselves to match the low level of demand.

“We are laying seeds for future prosperity," he said. "It may not be here for three or four years."

Freelance reporter Dan Meisler can be reached at danmeisler@gmail.com.