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
| Dec 10, 2014
CannonDesign acquires Astorino, forms design-led design-build division
The merger also extends CannonDesign’s presence in the markets Astorino currently serves, namely Pittsburgh and Abu Dhabi.
| Dec 10, 2014
Must see: Babina's latest illustrations cast famous architecture quotes as colorful road signs
Babina has adapted quotes from famous names such as Frank Lloyd Wright, Alvar Aalto, and Mies Van Der Rohe.
| Dec 9, 2014
Steven Holl wins Mumbai City Museum competition with 'solar water' scheme
Steven Holl's design for the new wing features a reflective pool that will generate energy.
| Dec 9, 2014
ABC economist predicts continued construction industry growth in 2015
In his latest report, ABC's Chief Economist Anirban Basu forecasts nonresidential construction spending to expand by roughly 7.5% next year, led by the power, lodging, office, and manufacturing sectors.
| Dec 8, 2014
How brick and mortar enables online retail
According to a shopping preferences study conducted by A.T. Kearney, as many as two-thirds of shoppers go to a physical store before or after making an online purchase, writes Gensler's Jill Nickels.
| Dec 8, 2014
The year’s boldest BIM/VDC themes
High-speed rendering software, custom APIs, virtual reality tools, and BIM workflow tips were among the hottest BIM/VDC topics in 2014.
| Dec 8, 2014
AEC firms upbeat about financial results, 2015 looking rosier [exclusive BD+C survey]
The market outlook is brighter for U.S. architecture, engineering, and construction companies, with a majority of AEC firms reporting higher revenues, strong forecasts, and sound financial health, according to BD+C's annual Market Forecast Survey.
| Dec 8, 2014
The global sanitation crisis leads to 2.5 million deaths every year
When we see the incredible technology being produced by global plumbing manufacturers, it’s hard to conceive why no viable technical solution to the global sanitation issue has come forth, writes BD+C's Robert Cassidy.
| Dec 8, 2014
Moshe Safdie wants to reinvent airports with Jewel Changi Airport addition
A new addition to Singapore's Changi Airport, designed by Moshe Safdie, will feature a waterfall and extensive indoor gardens.