This paper is focused on the methods for the forecast of total output value of construction industry in China. The total output value of China's construction industry in the past seven years is selected as the research object based on the dynamic grey system GM (1,1) model. The modified residual error model and the correction of residuals' remainder are used to improve the accuracy of the model and forecast results. The simulated analysis indicates that the prediction accuracy of China's construction industry output value has been improved based on GM (1,1) modified residual error model. It could provide reference to the forecast of the total output value of China's short-term construction industry.