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
| Feb 17, 2012
Tremco Inc. headquarters achieves LEED Gold certification
Changes were so extensive that the certification is for new construction and not for renovation; officially, the building is LEED-NC.
| Feb 17, 2012
MacInnis joins Gilbane board of directors
MacInnis is the chairman and recently retired CEO of Connecticut-based EMCOR Group, Inc.
| Feb 16, 2012
Gain greater agility and profitability with ArchiCAD BIM software
White paper was written with the sole purpose of providing accurate, reliable information about critical issues related to BIM and what ArchiCAD with advanced technology such as the GRAPHISOFT BIM Server provide as an answer to address these issues.
| Feb 16, 2012
TLC Engineering for Architecture opens Chattanooga office
TLC Engineering for Architecture provides mechanical, electrical, structural, plumbing, fire protection, communication, technology, LEED, commissioning and energy auditing services.
| Feb 16, 2012
Summit Design + Build begins build-out for Emmi Solutions in Chicago
The new headquarters will total 20,455 sq. ft. and feature a loft-style space with exposed masonry and mechanical systems, 15 foot clear ceilings, two large rooftop skylights and private offices with full glass partition walls.
| Feb 16, 2012
Highland named president of McCarthy Building Companies’ California region
Highland moved into this new role in January 2012 following a six-month transition period with Carter Chappell, the company’s former president, California region.
| Feb 16, 2012
Big-box retailers not just for DIYers
Nearly half of all contractor purchases made from stores like Home Depot and Lowe's.
| Feb 16, 2012
4.8-megawatt solar power system completed at Jersey Gardens Mall
Solar array among the largest rooftop systems in North America.
| Feb 15, 2012
Fourth-generation Ryan to lead Ryan Companies AE team
Ryan leads a team of eight architects, four civil engineers, two landscape architects and two virtual building specialists in their efforts to realize their customer’s vision and needs through Ryan’s integrated project delivery system.
| Feb 15, 2012
NAHB sees gradual improvement in multifamily sales for boomers
However, since the conditions of the current overall housing market are limiting their ability to sell their existing homes, this market is not recovering as quickly as might have been expected.