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
MFPRO+ News | Dec 22, 2023
Document offers guidance on heat pump deployment for multifamily housing
ICAST (International Center for Appropriate and Sustainable Technology) has released a resource guide to help multifamily owners and managers, policymakers, utilities, energy efficiency program implementers, and others advance the deployment of VHE heat pump HVAC and water heaters in multifamily housing.
Sustainability | Dec 22, 2023
WSP unveils scenario-planning online game
WSP has released a scenario-planning online game to help organizations achieve sustainable development goals while expanding awareness about climate change.
Giants 400 | Dec 20, 2023
Top 160 Apartment and Condominium Architecture Firms for 2023
Gensler, Humphreys and Partners, Solomon Cordwell Buenz, and AO top BD+C's ranking of the nation's largest apartment building and condominium architecture and architecture/engineering (AE) firms for 2023, as reported in Building Design+Construction's 2023 Giants 400 Report.
Giants 400 | Dec 20, 2023
Top 90 Student Housing Architecture Firms for 2023
Niles Bolton Associates, Solomon Cordwell Buenz, BKV Group, and Humphreys and Partners Architects top BD+C's ranking of the nation's largest student housing facility architecture and architecture/engineering (AE) firms for 2023, as reported in Building Design+Construction's 2023 Giants 400 Report.
Healthcare Facilities | Dec 19, 2023
A new hospital in Duluth, Minn., is now the region’s largest healthcare facility
In Duluth, Minn., the new St. Mary’s Medical Center, designed by EwingCole, is now the largest healthcare facility in the region. The hospital consolidates Essentia Health’s healthcare services under one roof. At about 1 million sf spanning two city blocks, St. Mary’s overlooks Lake Superior, providing views on almost every floor of the world’s largest freshwater lake.
Government Buildings | Dec 19, 2023
New Pennsylvania State Archives building holds documents dating back to 1680
Work was recently completed on a new Pennsylvania State Archives building in Harrisburg, Penn. The HGA-designed, 146,000-sf facility offers numerous amenities, including computers, scanners, printers, a kitchenette with seating, lockers, a meeting room, a classroom, an interactive video wall, gallery, and all-gender restrooms. The features are all intended to provide a welcoming and comfortable environment for visitors.
Urban Planning | Dec 18, 2023
The impacts of affordability, remote work, and personal safety on urban life
Data from Gensler's City Pulse Survey shows that although people are satisfied with their city's experience, it may not be enough.
MFPRO+ News | Dec 18, 2023
Berkeley, Calif., raises building height limits in downtown area
Facing a severe housing shortage, the City of Berkeley, Calif., increased the height limits on residential buildings to 12 stories in the area close to the University of California campus.
Green | Dec 18, 2023
Class B commercial properties gain more from LEED certification than Class A buildings
Class B office properties that are LEED certified command a greater relative benefit than LEED-certified Class A buildings, according to analysis from CBRE. The Class B LEED rent advantage over non-LEED is about three times larger than the premium earned by Class A LEED buildings.
Codes and Standards | Dec 18, 2023
ASHRAE releases guide on grid interactivity in the decarbonization process
A guide focusing on the critical role of grid interactivity in building decarbonization was recently published by ASHRAE. The Grid-Interactive Buildings for Decarbonization: Design and Operation Resource Guide provides information on maximizing carbon reduction through buildings’ interaction with the electric power grid.
