Despite the lingering effects of an over-built housing market, the continued difficulty to obtain financing for real estate projects, budget shortfalls at state and municipal governments and the anxiety surrounding the prolonged European debt crisis, there are signs that the U.S. design and construction industry will be improving.
Corporate profits have returned to pre-recession levels and businesses have subsequently been increasing their capital spending, borrowing costs are at record low levels and pent up demand for commercial and retail projects factors into what projects to be a 2.1% rise in spending this year for nonresidential construction projects.
The American Institute of Architects (AIA) semi-annual Consensus Construction Forecast, a survey of the nation’s leading construction forecasters, also projects a 6.4% increase of spending in 2013.
“Spending on hotels, industrial plants and commercial properties are going to set the pace for the construction industry over the next two years,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “The institutional market won’t experience the same growth, but healthcare facilities and places of worship are poised for a positive economic outlook in that sector.”
|
Market Segment Consensus Growth Forecasts |
2012 |
2013 |
|
Overall nonresidential |
2.1% |
6.4% |
|
Commercial / industrial |
5.6% |
11.4% |
|
Hotels |
10.2% |
19.7% |
|
Industrial |
6.0% |
10.2% |
|
Retail |
5.0% |
9.9% |
|
Office buildings |
4.3% |
9.6% |
|
Institutional |
-0.1% |
3.6% |
|
Religious |
5.1% |
6.3% |
|
Healthcare facilities |
4.5% |
5.3% |
|
Amusement / recreation |
0.2% |
6.5% |
|
Education |
-1.7% |
3.1% |
|
Public safety |
-3.8% |
0.3% |
Remarking on what could derail a positive turnaround, Baker added, “We are concerned that the unusually high energy costs, given the overall weakness in the economy, might trigger a jolt in inflation and hamstring economic recovery. The housing market also needs prices to stabilize and to resolve the high number of delinquencies and foreclosures before it can fully recover.” BD+C
Related Stories
Industry Research | Nov 28, 2017
2018 outlook: Economists point to slowdown, AEC professionals say ‘no way’
Multifamily housing and senior living developments head the list of the hottest sectors heading into 2018, according a survey of 356 AEC professionals.
Multifamily Housing | Nov 28, 2017
Elementary school, daycare campus will serve Toronto’s skyrise neighborhood
The $65 million Canoe Landing Campus brings much needed social infrastructure to the 20,000 residents of Toronto’s CityPlace towers.
Architects | Nov 28, 2017
Adding value through integrated technology requires a human touch
To help strike that delicate balance between the human and the high-tech, we must first have an in-depth understanding of our client’s needs as well as a manufacturer’s capabilities.
Architects | Nov 17, 2017
How to leverage historic tax credits
About 90% of the time prospective clients are not aware of historic tax credits.
Sponsored | Architects | Nov 16, 2017
Growing your AEC firm through an exceptional client experience
Many small AEC firms don’t feel they have the time to focus and create clear marketing messages.
Multifamily Housing | Nov 15, 2017
6 noteworthy multifamily developments: artists housing, tech lofts, resort-style senior living
These recently completed projects represent emerging trends and design innovations in the multifamily sector.
Architects | Nov 9, 2017
AECOM and Van Alen Institute announce four Urban SOS® 2017 finalists with bold ideas for creating more equitable cities
Multidisciplinary student teams were challenged to redefine the traditional “hour city” radius, providing broader access to opportunity.
Multifamily Housing | Nov 8, 2017
No place like home: LA’s The Six provides permanent supportive housing for veterans
The 52-unit development gives hope and dignity to homeless or disabled veterans and others in need.
Healthcare Facilities | Nov 6, 2017
Design isn’t enough to foster collaboration in healthcare and research spaces
A new Perkins Eastman white paper finds limited employee interaction at NYU Winthrop Hospital, a year after it opened.
Architects | Nov 6, 2017
How to start a negotiation: Begin as you mean to continue
How you start a negotiation often will determine where you end up, writes negotiation and mediation expert Brenda Radmacher.
