Construction starts for 2009 are projected by McGraw Hill Construction to be down 25 percent from 2008. McGraw Hill does anticipate a slight upturn in construction starts in 2010, but it is an increase that will not nearly make up for the downturn of the last two years. Fears of a double-dip recession, high unemployment, and a reduction in stimulus spending do not bode well for the coming year. Outside of government spending, there appears to be some activity in the health care, education, and energy segments. Since mid-2008, there has been a surge in new green building projects, but a marked slowdown in green insurance products.

Looking Ahead

As a result of construction starts dropping significantly in 2009, the insurance market for controlled insurance programs remains competitive, with greater capacity and more insurers competing for fewer projects. Where projects have been stopped or cancelled, carriers have responded by waiving minimum premiums and closing these projects out.