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 | Sep 12, 2022
FWA Group joins national architecture, interior design, and planning firm Hord Coplan Macht
Hord Coplan Macht acquires FWA Group.
| Sep 12, 2022
Staff at New York City architecture firm is first in U.S. to unionize
Staff at New York City architecture firm is first in U.S. to unionize.
| Sep 12, 2022
San Antonio’s new courthouse aims to provide safety and security while also welcoming the public
The San Antonio Federal Courthouse, which opened earlier this year, replaces a courthouse that had been constructed as a pavilion for the 1968 World’s Fair.
Giants 400 | Sep 9, 2022
Top 20 Casino Architecture + AE Firms for 2022
JCJ Architecture, DLR Group, HBG Design, and Cuningham top the ranking of the nation's largest casino architecture and architecture/engineering (AE) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report.
Giants 400 | Sep 9, 2022
Top 120 Hospitality Sector Architecture + AE Firms for 2022
Gensler, WATG, HKS, and JCJ Architecture top the ranking of the nation's largest hospitality facilities sector architecture and architecture/engineering (AE) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report. Note: This ranking includes revenue for all hospitality facilities work, including casinos, hotels, and resorts.
| Sep 9, 2022
Add sand shortage to supply chain woes
As if it wasn’t enough to have lumber, windows, doors, and metal pipe in short supply, you can add sand, which is theoretically plentiful on Earth, to the list of construction materials that can be hard to come by.
Giants 400 | Sep 8, 2022
Top 115 Hotel Sector Architecture + AE Firms for 2022
Gensler, WATG, HKS, and Stantec top the ranking of the nation's largest hotel and resort sector architecture and architecture/engineering (AE) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report.
Senior Living Design | Sep 8, 2022
What’s new with AQ: The top trends in active adult living
Today's 55-or-better buyers are ready to design their lives and their homes as they see fit. With so much growth on tap, builders and developers must stay apprised of trends related to home, environment, and culture of 55+ communities.
Sports and Recreational Facilities | Sep 8, 2022
Chicago Bears unveil preliminary master plan for suburban stadium district
As the 2022 NFL season kicks off, the league’s original franchise is fortifying plans to leave its landmark lakefront stadium for a multi-billion-dollar mixed-use stadium district in northwest suburban Arlington Heights.
| Sep 8, 2022
The Twin Cities’ LGBTQ health clinic moves into a new and improved facility
For more than 50 years, Family Tree Clinic has provided reproductive and sexual health services to underserved populations—from part of an old schoolhouse, until recently.