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
Industrial Facilities | Mar 6, 2023
The largest planned logistics and business park in North America gets under way in Southern California
The $25 billion World Logistics Center will boost the supply chain capabilities of Southern California and will serve as a distribution center for destinations across the continent.
Healthcare Facilities | Mar 6, 2023
NBBJ kicks off new design podcast with discussion on behavioral health facilities
During the second week of November, the architecture firm NBBJ launched a podcast series called Uplift, that focuses on the transformative power of design. Its first 30-minute episode homed in on designing for behavioral healthcare facilities, a hot topic given the increasing number of new construction and renovation projects in this subsector.
K-12 Schools | Mar 6, 2023
Benefitting kids through human-centric high school design
Ingrid Krueger, AIA, LEED AP, shares why empathetic, well-designed spaces are critical in high schools.
Adaptive Reuse | Mar 5, 2023
Pittsburgh offers funds for office-to-residential conversions
The City of Pittsburgh’s redevelopment agency is accepting applications for funding from developers on projects to convert office buildings into affordable housing. The city’s goals are to improve downtown vitality, make better use of underutilized and vacant commercial office space, and alleviate a housing shortage.
Student Housing | Mar 5, 2023
Calif. governor Gavin Newsom seeks to reform environmental law used to block student housing
California Gov. Gavin Newsom wants to reform a landmark state environmental law that he says was weaponized by wealthy homeowners to block badly needed housing for students at the University of California, Berkeley.
Green Renovation | Mar 5, 2023
Dept. of Energy offers $22 million for energy efficiency and building electrification upgrades
The Buildings Upgrade Prize (Buildings UP) sponsored by the U.S. Department of Energy is offering more than $22 million in cash prizes and technical assistance to teams across America. Prize recipients will be selected based on their ideas to accelerate widespread, equitable energy efficiency and building electrification upgrades.
Windows and Doors | Mar 5, 2023
2022 North American Fenestration Standard released
The 2022 edition of AAMA/WDMA/CSA 101/I.S.2/A440, “North American Fenestration Standard/Specification for windows, doors, and skylights” (NAFS) has been published. The updated 2022 standard replaces the 2017 edition, part of a continued evolution of the standard to improve harmonization across North America, according to a news release.
AEC Innovators | Mar 3, 2023
Meet BD+C's 2023 AEC Innovators
More than ever, AEC firms and their suppliers are wedding innovation with corporate responsibility. How they are addressing climate change usually gets the headlines. But as the following articles in our AEC Innovators package chronicle, companies are attempting to make an impact as well on the integrity of their supply chains, the reduction of construction waste, and answering calls for more affordable housing and homeless shelters. As often as not, these companies are partnering with municipalities and nonprofit interest groups to help guide their production.
Modular Building | Mar 3, 2023
Pallet Shelter is fighting homelessness, one person and modular pod at a time
Everett, Wash.-based Pallet Inc. helped the City of Burlington, Vt., turn a municipal parking lot into an emergency shelter community, complete with 30 modular “sleeping cabins” for the homeless.
Codes | Mar 2, 2023
Biden Administration’s proposed building materials rules increase domestic requirements
The Biden Administration’s proposal on building materials rules used on federal construction and federally funded state and local buildings would significantly boost the made-in-America mandate. In the past, products could qualify as domestically made if at least 55% of the value of their components were from the U.S.
