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
Smart Buildings | Jul 1, 2024
GSA to invest $80 million on smart building technologies at federal properties
The U.S. General Services Administration (GSA) will invest $80 million from the Inflation Reduction Act (IRA) into smart building technologies within 560 federal buildings. GSA intends to enhance operations through granular controls, expand available reporting with more advanced metering sources, and optimize the operator experience.
Sustainability | Jul 1, 2024
Amazon, JPMorgan Chase among companies collaborating with ILFI to advance carbon verification
Four companies (Amazon, JPMorgan Chase, JLL, and Prologis) are working with the International Living Future Institute to support development of new versions of Zero Carbon Certification.
K-12 Schools | Jul 1, 2024
New guidelines for securing schools and community spaces released by the Door Security and Safety Foundation
The Door Security and Safety Foundation (DSSF), in collaboration with Door and Hardware Institute (DHI), recently released of “Are Your Door Openings Secure?.” The document provides guidelines to equip school administrators, building management personnel, and community leaders with a clear roadmap to create a secure and safe environment.
Products and Materials | Jun 30, 2024
Top products from AIA 2024
This month, Building Design+Construction editors are bringing you the top products displayed at the 2024 AIA Conference on Architecture & Design. Nearly 550 building product manufacturers showcased their products—here are 17 that caught our eye.
University Buildings | Jun 28, 2024
The American University in Cairo launches a 270,000-sf expansion of its campus in New Cairo, Egypt
In New Cairo, Egypt, The American University in Cairo (AUC) has broken ground on a roughly 270,000-sf expansion of its campus. The project encompasses two new buildings intended to enhance the physical campus and support AUC’s mission to provide top-tier education and research.
MFPRO+ New Projects | Jun 27, 2024
Chicago’s long-vacant Spire site will be home to a two-tower residential development
In downtown Chicago, the site of the planned Chicago Spire, at the confluence of Lake Michigan and the Chicago River, has sat vacant since construction ceased in the wake of the Great Recession. In the next few years, the site will be home to a new two-tower residential development, 400 Lake Shore.
Codes and Standards | Jun 27, 2024
Berkeley, Calif., voters will decide whether to tax large buildings with gas hookups
After a court struck down a first-in-the-nation ban on gas hookups in new buildings last year, voters in Berkeley, Calif., will have their say in November on a measure to tax large buildings that use natural gas.
Mass Timber | Jun 26, 2024
Oregon State University builds a first-of-its-kind mass timber research lab
In Corvallis, Oreg., the Jen-Hsun Huang and Lori Mills Huang Collaborative Innovation Complex at Oregon State University aims to achieve a distinction among the world’s experimental research labs: It will be the first all-mass-timber lab meeting rigorous vibration criteria (2000 micro-inches per second, or MIPS).
Sustainability | Jun 26, 2024
5 ways ESG can influence design and create opportunities
Gensler sustainability leaders Stacey Olson, Anthony Brower, and Audrey Handelman share five ways they're rethinking designing for ESG, using a science-based approach that can impact the ESG value chain.
Student Housing | Jun 25, 2024
P3 student housing project with 176 units slated for Purdue University Fort Wayne
A public/private partnership will fund a four-story, 213,000 sf apartment complex on Purdue University Fort Wayne’s (PFW’s) North Campus in Fort Wayne, Indiana. The P3 entity was formed exclusively for this property.