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
Museums | Apr 16, 2015
SANAA and Snøhetta tie at first place for Budapest museum bid
The two firms submitted designs for the New National Gallery and Ludwig Museum, one of five planned museums to be constructed in a park just outside the urban center of Hungary’s capital.
High-rise Construction | Apr 16, 2015
Construction begins on Seattle's Tibet-inspired Potala Tower
Construction on the 41-story Potala Tower in Seattle finally kicked off following a ground-breaking ceremony seven months ago.
Architects | Apr 14, 2015
Jeanne Gang, Bjarke Ingels among participants for inaugural Chicago Architecture Biennial
Some big names include Bjarke Ingels Group and Studio Gang Architects
Sports and Recreational Facilities | Apr 13, 2015
USTA breaks ground on what will be the country’s largest tennis complex
The 63-acre facility is being positioned as a cornerstone for a sports innovation and performance district in Lake Nona, Fla., a 7,000-acre master planned community that continues to expand.
Building Team Awards | Apr 10, 2015
14 projects that push AEC teaming to the limits
From Lean construction to tri-party IPD to advanced BIM/VDC coordination, these 14 Building Teams demonstrate the power of collaboration in delivering award-winning buildings. These are the 2015 Building Team Award winners.
Building Team Awards | Apr 10, 2015
Prefab saves the day for Denver hospital
Mortenson Construction and its partners completed the 831,000-sf, $623 million Saint Joseph Hospital well before the January 1, 2015, deadline, thanks largely to their extensive use of offsite prefabrication.
Building Team Awards | Apr 10, 2015
Anaheim’s soaring intermodal hub
Anaheim's Regional Transportations Intermodal Center is the largest ETFE project in North America.
Building Team Awards | Apr 10, 2015
Virtual collaboration helps complete a hospital in 24 months
PinnacleHealth needed a new hospital STAT! This team delivered it in two years, start to finish.
Building Team Awards | Apr 10, 2015
New arts venue reinvigorates Virginia Tech's campus
The STV-led Building Team creates a world-class performance and arts venue with learning and entrepreneurial dimensions.
BIM and Information Technology | Apr 9, 2015
A carboard box by Google can bring virtual reality to architecture
The global search engine giant has launched a new product, Google Cardboard, that easily allows users to experience virtual reality.