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
Architects | Jul 5, 2023
Niles Bolton Associates promotes Jeffrey Smith, AIA, to President and C. Cannon Reynolds, AIA, to Managing Director
Niles Bolton Associates (NBA), a leading architecture, planning and design firm, announces leadership changes as a part of its ongoing commitment to future growth. Current Executive Vice President, Jeffrey Smith, AIA, has been named President and C. Cannon Reynolds, AIA, has been named Managing Director effective June 30, 2023.
Mixed-Use | Jun 29, 2023
Massive work-live-play development opens in LA's new Cumulus District
VOX at Cumulus, a 14-acre work-live-play development in Los Angeles, offers 910 housing units and 100,000 sf of retail space anchored by a Whole Foods outlet. VOX, one of the largest mixed-use communities to open in the Los Angeles area, features apartments and townhomes with more than one dozen floorplans.
Office Buildings | Jun 28, 2023
When office-to-residential conversion works
The cost and design challenges involved with office-to-residential conversions can be daunting; designers need to devise creative uses to fully utilize the space.
Architects | Jun 28, 2023
CSHQA hires first CEO in company's 134-year history
The Board of Directors of CSHQA announced the appointment of Ryan D. Martin, AIA NCARB as Chief Executive Officer.
Multifamily Housing | Jun 28, 2023
Sutton Tower, an 80-story multifamily development, completes construction in Manhattan’s Midtown East
In Manhattan’s Midtown East, the construction of Sutton Tower, an 80-story residential building, has been completed. Located in the Sutton Place neighborhood, the tower offers 120 for-sale residences, with the first move-ins scheduled for this summer. The project was designed by Thomas Juul-Hansen and developed by Gamma Real Estate and JVP Management. Lendlease, the general contractor, started construction in 2018.
Architects | Jun 27, 2023
Why architects need to think like developers, with JZA Architecture's Jeff Zbikowski
Jeff Zbikowski, Principal and Founder of Los Angeles-based JZA Architecture, discusses the benefits of having a developer’s mindset when working with clients, and why architecture firms lose out when they don’t have a thorough understanding of real estate regulations and challenges.
Apartments | Jun 27, 2023
Average U.S. apartment rent reached all-time high in May, at $1,716
Multifamily rents continued to increase through the first half of 2023, despite challenges for the sector and continuing economic uncertainty. But job growth has remained robust and new households keep forming, creating apartment demand and ongoing rent growth. The average U.S. apartment rent reached an all-time high of $1,716 in May.
Apartments | Jun 27, 2023
Dallas high-rise multifamily tower is first in state to receive WELL Gold certification
HALL Arts Residences, 28-story luxury residential high-rise in the Dallas Arts District, recently became the first high-rise multifamily tower in Texas to receive WELL Gold Certification, a designation issued by the International WELL Building Institute. The HKS-designed condominium tower was designed with numerous wellness details.
University Buildings | Jun 26, 2023
Addition by subtraction: The value of open space on higher education campuses
Creating a meaningful academic and student life experience on university and college campuses does not always mean adding a new building. A new or resurrected campus quad, recreational fields, gardens, and other greenspaces can tie a campus together, writes Sean Rosebrugh, AIA, LEED AP, HMC Architects' Higher Education Practice Leader.
Standards | Jun 26, 2023
New Wi-Fi standard boosts indoor navigation, tracking accuracy in buildings
The recently released Wi-Fi standard, IEEE 802.11az enables more refined and accurate indoor location capabilities. As technology manufacturers incorporate the new standard in various devices, it will enable buildings, including malls, arenas, and stadiums, to provide new wayfinding and tracking features.