Nonres construction spending to increase through 2012, growth projected for 2013

Even with the myriad of obstacles preventing a full scale recovery for the overall U.S. economy, the design and construction industry appears to have reasons to be at least modestly optimistic in the coming months and into next year.

A sharp spike in demand for industrial facilities so far this year, along with sustained demand for hotels and retail projects factors into what projects to be a 4.4% rise in spending this year for nonresidential construction projects – up from a projection of a 2.1% increase in the January Consensus Forecast.

The American Institute of Architects (AIA) semi-annual Consensus Construction Forecast, a survey of the nation’s leading construction forecasters, also projects a 6.2% increase of spending in 2013.

“With companies looking to bring back manufacturing jobs from overseas, there has been a sharp rise in demand for industrial facilities, which is leading to an upward revision in projections for future construction spending,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “Continued budget shortfalls at the state and local level, along with a depressed municipal bond market are holding the institutional market back from seeing similar upticks in spending.”

Market Segment Consensus Growth Forecasts	2012	2013
Overall nonresidential	4.4%	6.20%
Commercial / industrial	5.7%	10.20%
Industrial	12.9%	8.10%
Hotels	9.5%	18.20%
Retail	6.2%	9.00%
Office buildings	4.7%	8.70%
Institutional	0.7%	3.00%
Healthcare facilities	4.0%	7.50%
Education	0.3%	1.10%
Amusement / recreation	0.1%	2.30%
Public safety	0.0%	0.10%
Religious	-5.0%	3.00%

Remarking on what risks exist that could undermine these projections, Baker added, “Federal tax and spending changes – the so-called fiscal cliff – that may come into play in early 2013 could upset the economic applecart and prove detrimental to recovery possibilities. We will likely have a better sense after the presidential election what will happen with regards to the Bush-era tax cuts, Social Security payroll tax, extended unemployment, and deficit reduction plans that will have a ripple effect that will extend to the construction industry.” +

U.S. Army Fort Knox: Using the Earth for space heating and cooling. The U.S. Department of Energy’s (DOE) Federal Energy Management Program (FEMP) facilitates the Federal Government’s implementation of sound, cost-effective energy management and investment practices to enhance the nation’s energy security and environmental stewardship.

| Jun 27, 2012

HDR opens office in Beijing

The Beijing office is HDR’s second location in China; the firm’s other office is in Shanghai.

The $54 million, 203,000-sf AFRC facility in Middletown, Conn.

| Jun 27, 2012

KBE Building wins honor for Armed Forces Reserve Center

The construction phase was completed in just 16 months.

| Jun 27, 2012

SOM’s Baker receives honorary doctorate in engineering from Heriot-Watt University

Baker recognized for his career and influential contribution in the field of structural engineering.

Chicago is known for its green roofs but has few green walls, a trend that began

| Jun 25, 2012

Living green wall planned for InterContinental Chicago

Project, with price tag of $2 million to $3 million, needs council approval.

| Jun 25, 2012

AIA-NJ honors DMR Architects

The academic building, completed in 2009, provides classrooms, computer labs, faculty offices, and meeting spaces for the College, which has a steady 7% annual increase in enrollment.