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
| May 1, 2013
Data center construction remains healthy, but oversupply a concern
Facebook, Amazon, Microsoft, and Google are among the major tech companies investing heavily to build state-of-the-art data centers.
| May 1, 2013
Groups urge Congress: Keep energy conservation requirements for government buildings
More than 350 companies urge rejection of special interest efforts to gut key parts of Energy Independence and Security Act
| May 1, 2013
World’s tallest children’s hospital pushes BIM to the extreme
The Building Team for the 23-story Lurie Children’s Hospital in Chicago implements an integrated BIM/VDC workflow to execute a complex vertical program.
| Apr 30, 2013
Healthcare lighting innovation: Overhead fixture uses UV to kill airborne pathogens
Designed specifically for hospitals, nursing homes, child care centers, and other healthcare facilities where infection control is a concern, the Arcalux Health Risk Management System (HRMS) is an energy-efficient lighting fixture that doubles as a germ-killing machine.
| Apr 30, 2013
First look: North America's tallest wooden building
The Wood Innovation Design Center (WIDC), Prince George, British Columbia, will exhibit wood as a sustainable building material widely availablearound the globe, and aims to improve the local lumber economy while standing as a testament to new construction possibilities.
| Apr 26, 2013
Apple scales back Campus 2 plans to reduce price tag
Apple will delay the construction of a secondary research and development building on its "spaceship" campus in an attempt to drive down the cost of developing its new headquarters.
| Apr 26, 2013
Documentary shows 'starchitects' competing for museum project
"The Competition," a new documentary produced by Angel Borrego Cuberto of Madrid, focuses on the efforts of five 'starchitects' to capture the design contract for the new National Museum of Art of Andorra: a small country in the Pyrenees between Spain and France.
| Apr 26, 2013
Solving the parking dilemma in U.S. cities
ArchDaily's Rory Stott yesterday posted an interesting exploration of progressive parking strategies being employed by cities and designers. The lack of curbside and lot parking exacerbates traffic congestion, discourages visitors, and leads to increased vehicles emissions.
| Apr 26, 2013
Decaying city: Exhibit demonstrates the fragility of the man-made world
Theater set designer Johanna Mårtensson built a model cityscape out of bread only to watch it decay.
| Apr 25, 2013
SmithGroupJJR hires Lise Newman as Workplace Studio Leader in Detroit
SmithGroupJJR, one of the nation's largest architecture, engineering and planning firms, has hired architect Lise Newman, AIA, as Workplace Studio leader at its Detroit, Mich. office.