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
| Apr 12, 2011
Luxury New York high rise adjacent to the High Line
Located adjacent to New York City’s High Line Park, 500 West 23rd Street will offer 111 luxury rental apartments when it opens later this year.
| Apr 12, 2011
College of New Jersey facility will teach teachers how to teach
The College of New Jersey broke ground on its 79,000-sf School of Education building in Ewing, N.J.
| Apr 12, 2011
Mental hospital in Boston redeveloped as healthcare complex
An abandoned state mental health facility in Boston’s prestigious Longwood Medical Area is being transformed into the Mass Mental Health Center, a four-building mixed-use complex that includes a mental health day hospital, a clinical and office building, a medical research facility for Brigham and Women’s Hospital, and a residential facility.
| Apr 12, 2011
Miami courthouse design does justice to children and the environment
Suffolk Construction broke ground recently for the Miami-Dade County Children’s Courthouse, a $328 million project the firm has a 30-month contract to complete.
| Apr 12, 2011
Long-awaited San Francisco center is music to jazz organization’s ears
After 28 years, SFJAZZ is getting its first permanent home. The San Francisco-based nonprofit, which is dedicated to advancing the art of jazz through concerts and educational programs, contracted local design firm Mark Cavagnero Associates and general contractor Hathaway Dinwiddie to create a modern performance center in the city’s Hayes Valley neighborhood
| Apr 12, 2011
Entrance pavilion adds subtle style to Natural History Museum of Los Angeles
A $13 million gift from the Otis Booth Foundation is funding a new entrance pavilion at the Natural History Museum of Los Angeles County. CO Architects, Los Angeles, is designing the frameless structure with an energy-efficient curtain wall, vertical suspension rods, and horizontal knife plates to make it as transparent as possible.
| Apr 12, 2011
BIM Grows Up: Separating Hype from Reality in a 3D World
While BIM adoption still lags in both design and construction, some enterprising owners, architects, and contractors are unlocking the potential of this dynamic technology.
| Apr 12, 2011
Metal cladding: Enhancing design with single-skin panels, MCMs, and IMPs
Single-skin metal panels, metal composite panels, and insulated metal panels can add both aesthetic and functional value to your projects, if you use them correctly.
| Apr 12, 2011
American Institute of Architects announces Guide for Sustainable Projects
AIA Guide for Sustainable Projects to provide design and construction industries with roadmap for working on sustainable projects.
| Apr 11, 2011
Wind turbines to generate power for new UNT football stadium
The University of North Texas has received a $2 million grant from the State Energy Conservation Office to install three wind turbines that will feed the electrical grid and provide power to UNT’s new football stadium.
