Due to the weather-related slow start in the nonresidential building market during the first part of the year, and the prolonged weakness in the institutional sector, construction spending projections for the rest of the year have been lowered slightly.
The commercial construction sector is still looking at solid spending increases throughout the remainder of 2014, paced by high levels of demand for hotels and office buildings. The American Institute of Architects’ (AIA) semi-annual Consensus Construction Forecast, a survey of the nation’s leading construction forecasters, is projecting that spending will see a 4.9% increase in 2014 – down from the previous estimate of 5.8%, with next year’s projection holding at 8%.
VIDEO: AIA Chief Economist discusses economic trends for 3rd quarter of 2014
“The institutional market has been a drag on the overall recovery for the design and construction industry for the last few years, and until we see state and local governments ramp up spending for new education, healthcare and public safety structures there likely won’t be a widespread acceleration in spending for the entire industry,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “But we continue to have an optimistic outlook for the commercial and industrial sectors both for the rest of this year and into 2015.”
|
Market Segment Consensus Growth Forecasts |
2014 |
2015 |
|
|
|
|
|
Overall nonresidential building |
4.9% |
8.0% |
|
|
|
|
|
Commercial / industrial |
9.9% |
11.2% |
|
Hotels |
14.5% |
9.2% |
|
Office buildings |
12.8% |
13.3% |
|
Industrial facilities |
7.6% |
9.2% |
|
Retail |
7.4% |
10.4% |
|
|
|
|
|
Institutional |
-0.1% |
5.8% |
|
Amusement / recreation |
3.7% |
6.6% |
|
Education |
-0.1% |
5.7% |
|
Healthcare facilities |
-1.8% |
6.6% |
|
Religious |
-4.1% |
0.7% |
|
Public safety |
-4.2% |
3.3% |
Baker continued, “While there does not appear to be any structural frailties in the overall economy that could possibly derail increasing levels of construction spending over the next 18 months, lending standards at financial institutions continue to fall well short of the increasing demand for commercial real estate loans, which is another factor that serves as a wild card and a source of concern for the entire industry.”
About the AIA Consensus Construction Forecast Panel
The AIA Consensus Construction Forecast Panel is conducted twice a year with the leading nonresidential construction forecasters in the United States including, McGraw Hill Construction, Wells Fargo Securities, IHS-Global Insight, Moody’s economy.com, Reed Business Information, Associated Builders & Contractors and FMI. The purpose of the Consensus Construction Forecast Panel is to project business conditions in the construction industry over the coming 12 to 18 months. The Consensus Construction Forecast Panel has been conducted for 15 years.
About The American Institute of Architects
Founded in 1857, members of the American Institute of Architects consistently work to create more valuable, healthy, secure, and sustainable buildings, neighborhoods, and communities. Through nearly 300 state and local chapters, the AIA advocates for public policies that promote economic vitality and public well being. Members adhere to a code of ethics and conduct to ensure the highest professional standards. The AIA provides members with tools and resources to assist them in their careers and business as well as engaging civic and government leaders, and the public to find solutions to pressing issues facing our communities, institutions, nation and world. Visit www.aia.org.
Related Stories
Healthcare Facilities | Dec 15, 2021
MEP design considerations for rural hospitals
Rural hospitals present unique opportunities and challenges for healthcare facility operators. Oftentimes, the infrastructure and building systems have not been updated for years and require significant improvements in order to meet today’s modern medical demands. Additionally, as these smaller, more remote hospitals are acquired by larger regional and national healthcare systems, the first step by new ownership is often to update and rehabilitate the building. But how can this be done thoughtfully, economically, and efficiently in ways that allow the engineering and facility staff to adapt to the changes? And how can the updates accurately reflect the specific needs of rural communities and the afflictions with which these areas most commonly face?
Architects | Dec 13, 2021
Dan Hart, FAIA, inaugurated AIA 2022 President
Dan Hart will be the AIA's 98th President.
Architects | Dec 13, 2021
MASS Design Group receives 2022 AIA Architecture Firm Award
The annual AIA Architecture Firm Award is the highest honor the AIA bestows on an architecture practice.
Architects | Dec 13, 2021
2022 AIA Gold Medal awarded to Angela Brooks and Lawrence Scarpa
The Gold Medal honors an individual or pair whose significant body of work has had a lasting influence on the theory and practice of architecture.
K-12 Schools | Dec 10, 2021
Trends in K-12 school design, with Dan Boggio and Melissa Turnbaugh of PBK
Dan Boggio and Melissa Turnbaugh of PBK, the largest K-12 design firm in the U.S., discuss the favorable market conditions and the latest trends in K-12 school design with BD+C's Rob Cassidy.
Architects | Dec 9, 2021
Hoffmann Architects wins Connecticut American Institute of Architects Justice, Equity, Diversity & Inclusion Award
The AIA Connecticut J.E.D.I. Challenge, launched in November 2020, offers member firms the opportunity to commit to actions in each of the Challenge areas.
Giants 400 | Dec 5, 2021
2021 Justice Facility Sector Giants: Top architecture, engineering, and construction firms in the U.S. justice facility/public safety sector
Turner Construction, DLR Group, AECOM, and Stantec top BD+C's rankings of the nation's largest architecture, engineering, and construction firms for justice facility/public safety buildings work, including correctional facilities, fire stations, jails, police stations, and prisons, as reported in the 2021 Giants 400 Report.
Giants 400 | Dec 3, 2021
2021 Hotel Sector Giants: Top architecture, engineering, and construction firms in the U.S. hospitality sector
Gensler, Jacobs, Suffolk Construction, and WATG top BD+C's rankings of the nation's largest hotel sector architecture, engineering, and construction firms, as reported in the 2021 Giants 400 Report.
Architects | Nov 29, 2021
LRK Names Tony Pellicciotti ‘Managing Principal’ of firm
Pellicciotti is one of LRK’s fourteen principals representing its markets in Memphis, Dallas, Philadelphia, Orlando/Celebration, New Orleans, Baton Rouge, Little Rock, and Princeton.
Architects | Nov 23, 2021
HMC names new Director of Design
James Krueger will oversee design and lead strategies to improve the impact of HMC’s work.
