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.” +
Related Stories
| Sep 13, 2010
Palos Community Hospital plans upgrades, expansion
A laboratory, pharmacy, critical care unit, perioperative services, and 192 new patient beds are part of Palos (Ill.) Community Hospital's 617,500-sf expansion and renovation.
| Sep 13, 2010
China's largest single-phase hospital planned for Shanghai
RTKL's Los Angles office is designing the Shanghai Changzheng New Pudong Hospital, which will be the largest new hospital built in China in a single phase.
| Sep 13, 2010
Richmond living/learning complex targets LEED Silver
The 162,000-sf living/learning complex includes a residence hall with 122 units for 459 students with a study center on the ground level and communal and study spaces on each of the residential levels. The project is targeting LEED Silver.
| Sep 13, 2010
World's busiest land port also to be its greenest
A larger, more efficient, and supergreen border crossing facility is planned for the San Ysidro (Calif.) Port of Entry to better handle the more than 100,000 people who cross the U.S.-Mexico border there each day.
| Sep 13, 2010
Triple-LEED for Engineering Firm's HQ
With more than 250 LEED projects in the works, Enermodal Engineering is Canada's most prolific green building consulting firm. In 2007, with the firm outgrowing its home office in Kitchener, Ont., the decision was made go all out with a new green building. The goal: triple Platinum for New Construction, Commercial Interiors, and Existing Buildings: O&M.
| Sep 13, 2010
Stadium Scores Big with Cowboys' Fans
Jerry Jones, controversial billionaire owner of the Dallas Cowboys, wanted the team's new stadium in Arlington, Texas, to really amp up the fan experience. The organization spent $1.2 billion building a massive three-million-sf arena that seats 80,000 (with room for another 20,000) and has more than 300 private suites, some at field level-a first for an NFL stadium.
| Sep 13, 2010
'A Model for the Entire Industry'
How a university and its Building Team forged a relationship with 'the toughest building authority in the country' to bring a replacement hospital in early and under budget.
| Sep 13, 2010
Committed to the Core
How a forward-looking city government, a growth-minded university, a developer with vision, and a determined Building Team are breathing life into downtown Phoenix.
| Sep 13, 2010
Conquering a Mountain of Construction Challenges
Brutal winter weather, shortages of materials, escalating costs, occasional visits from the local bear population-all these were joys this Building Team experienced working a new resort high up in the Sierra Nevada.