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
| Nov 7, 2012
John Portman & Associates awarded new high rise in China
108-story building to rise in Nanning, the Capital City of Guangxi Province.
| Nov 7, 2012
Two Thornton Tomasetti projects receive 2012 International Architecture Awards for Best Global Design
The awards, presented by the Chicago Athenaeum Museum of Architecture Design, the European Center for Architecture Art Design, and Urban Studies and Metropolitan Arts Press, Ltd., recognize excellence in architecture and urban planning.
| Nov 6, 2012
Honeywell donates first responder products for Hurricane Sandy relief and recovery efforts
Honeywell Humanitarian Relief Fund to provide aid to local employees affected by Hurricane Sandy.
| Nov 6, 2012
Uponor files patent infringement suit against Sioux Chief Manufacturing
Uponor is seeking damages and an injunction to prevent Sioux Chief from selling the PowerPEX F1960 Ring with Stop, which it believes violates Uponor’s patent.
| Nov 6, 2012
Simpson Strong-Tie donates $25K to hurricane support
The company will also be matching employees’ personal contributions to the Red Cross and other nonprofit disaster relief organizations.
| Nov 6, 2012
Goettsch Partners designs new tower in Shunde, China
200-meter-tall building will be located between Guangzhou and Hong Kong.
| Nov 5, 2012
Brasfield & Gorrie awarded new steel processing facility for Kloeckner Metals
The construction will take place on a 16-acre greenfield site at ThyssenKrupp Industrial Park in Calvert.
| Nov 5, 2012
Trimble acquires Vico assets, extends design-build-operate capabilities
Software to add 5D management to Trimble’s Solutions for vertical construction contractors.
| Oct 30, 2012
Lord, Aeck & Sargent announces four student life facility wins
Projects recognize the architecture firm’s expertise on a nationwide basis.