Building slowdown ahead?

AFTER two years of modest growth in the United States construction industry, expansion is projected to slow in 1994, according to the ``Construction Industry Forecast.''

The report, representing the opinions of 900 construction equipment distributors and contractors nationwide, is prepared annually by the CIT Group/Industrial Financing, a financing company in Livingston, N.J. It also provides regional forecasts of anticipated construction activity.

While most of the country will experience stagnant or reduced levels of construction activity, the South Atlantic region (Delaware, Washington, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, and West Virginia) and the Mountain states (Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, and Wyoming) will continue to see growth, the report says. Respondents say an upturn in the economy will launch increased activity.

Survey respondents are not optimistic about net income gains in the year ahead. Contractors' expectations for increased profits in 1994 are at their lowest level in the history of CIT's forecast. Only 27 percent expect to have an increase in net income - down from 35 percent last year - while 17 percent are anticipating an actual reduction in profits.

There is good news for equipment dealers in 1994, as contractors appear to be much more likely to be replacing aging equipment. The average value of planned equipment purchases for contractors in 1994 is $60,600 for new equipment and $32,500 for used. Despite lowered projections for construction activity and for net income gains, respondents still say the construction industry offers numerous opportunities. Residential building will provide most of the work for the nations builders, the report says.