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
Healthcare Facilities | Aug 28, 2015
7 (more) steps toward a quieter hospital
Every hospital has its own “culture” of loudness and quiet. Jacobs’ Chris Kay offers steps to a therapeutic auditory environment.
Healthcare Facilities | Aug 28, 2015
Shhh!!! 6 ways to keep the noise down in new and existing hospitals
There’s a ‘decibel war’ going on in the nation’s hospitals. Progressive Building Teams are leading the charge to give patients quieter healing environments.
Architects | Aug 28, 2015
How to transition leadership within your architecture firm, Part 2
Close to retiring? Without a plan for leadership transition, you might not foster candidates who will be capable of taking over the reins, says Whitehorn Financial's Steve Whitehorn.
Retail Centers | Aug 27, 2015
Vallco Shopping Mall renovation plans include 'largest green roof in the world'
The new owners of the mall in Cupertino, Calif., intend to transform the outdated shopping mall into a multi-purpose complex, topped by a 30-acre park.
Libraries | Aug 27, 2015
Barack Obama Foundation begins search for presidential library architect
Both national and foreign firms will compete for chance to design the Chicago-based Presidential Center.
Architects | Aug 27, 2015
How to transition leadership within your architecture firm, Part 1
In order for your firm to thrive and preserve your legacy after retirement, it is essential that you create a strategic plan to not only transition ownership of your firm but its leadership as well.
Mixed-Use | Aug 26, 2015
Innovation districts + tech clusters: How the ‘open innovation’ era is revitalizing urban cores
In the race for highly coveted tech companies and startups, cities, institutions, and developers are teaming to form innovation hot pockets.
Office Buildings | Aug 19, 2015
Good design can combat open-office issues
Three tricks to maintain privacy and worker production in a cube-less world, according to GS&P's Jack E. Weber
Architects | Aug 19, 2015
Despite dip, architecture billings remain strong
The American Institute of Architects (AIA) reported the July ABI score was 54.7, down a point from a mark of 55.7 in June.
Architects | Aug 17, 2015
Historic power plant converted to modern offices in Minnesota
A landmark power plant in Owatonna, Minn., damaged in a 2010 flood has new life as the headquarters of Owatonna Public Utilities following a renovation by architects Leo A. Daly.
