Construction economists optimistic about 2014 growth

Associated Builders and Contractors (ABC) Chief Economist Anirban Basu, American Institute of Architects (AIA) Chief Economist Kermit Baker and National Association of Home Builders (NAHB) Chief Economist David Crowe provided a collaborative economic forecast combining their expert economic analysis on leading, present and lagging economic indicators.

"A combination of low interest rates; wealth effects stemming from a booming stock market and rising home prices; surging energy production; and expanding industrial output has helped position the U.S. economy for more rapid growth during the next several quarters," said ABC Chief Economist Anirban Basu. "This will lead to more robust recovery in the U.S. nonresidential construction industry, which has also been aided by stable materials prices and improving commercial real estate fundamentals. ABC predicts 7 percent nominal nonresidential construction growth in 2014, despite ongoing challenges in the public construction segment."

"We continue to have an optimistic outlook for the commercial and industrial sectors for the rest of this year and into 2015," said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. "However, until we see state and local governments ramp up spending for new education, health care and public safety structures there likely won’t be a widespread acceleration in spending for the entire industry."

"Economic pick-up in the second quarter was coupled with a return in housing construction," said David Crowe, chief economist for NAHB. "We expect continued modest growth in housing construction as employment rises and more household formations take place. However, continued tight supplies of labor and land will put upward pressure on new home prices."

In addition to this forecast, AIA released its latest Architecture Billings Index (ABI) July 23, NAHB released its latest NAHB/Wells Fargo Housing Market Index (HMI) July 16 and ABC’s quarterly Construction Backlog Indicator (CBI) will be released Aug. 19.

Turner Construction Company announced that the First Quarter 2013 Turner Building Cost Index – which measures costs in the non-residential building construction market in the United States – has increased to a value of 849. This reflects a 1.19% increase from the Fourth Quarter 2012 and a 3.41% increase from the First Quarter 2012.

| Mar 20, 2013

Architecture Billings Index up again in February

The American Institute of Architects reported the February ABI score was 54.9, up slightly from a mark of 54.2 in January. This score reflects a strong increase in demand for design services.