by Shane Henson — February 5, 2014—While nonresidential building activity was nothing to brag about in 2013, with a steady but slow rise, this year is looking brighter for construction professionals, according to a survey conducted by the American Institute of Architects of the nation’s leading construction forecasters.
Per the survey, healthy fundamentals in the commercial property market combined with the international economy returning to more traditional growth levels are factoring into a projected increase in growth for the design and construction industry. Led by the hotel and retail project categories, the commercial sector looks to see the biggest gains in construction spending, with demand for institutional projects increasing at a more moderate level. Overall, AIA forecasts that spending will see a 5.8% increase in 2014, with next year’s projections raised to 8%.
“Since the overall economy is stabilizing, there should be a significant improvement in the outlook for the construction industry that has been recovering at a slow and steady pace the last two years,” said AIA Chief Economist Kermit Baker. “At a more granular level, the surging housing market, growing commercial property values, and declining office and retail vacancies are all contributing to what is expected to amount to a much greater spending on nonresidential building projects.”
The survey offered industry-specific projections of spending increases for 2014 and 2015:
- Hotels: 13.1% in 2014; 9.2% in 2015
- Retail: 10.5% in 2014; 11.5% in 2015
- Office buildings: 9.2% in 2014; 10.8% in 2015
- Industrial facilities: 7.8% in 2014; 8.7% in 2015
- Institutional: 3.4% in 2014; 6.3% in 2015
- Amusement/recreation: 9.9% in 2014; 7.5% in 2015
- Healthcare facilities: 5.2% in 2014; 7.8% in 2015
- Education: 2.8% in 2014; 5.8% in 2015
- Public safety: -0.2% in 2014; 3.1% in 2015
The 15th annual AIA Consensus Construction Forecast Panel is conducted twice a year with the leading nonresidential construction forecasters in the United States, including McGraw Hill Construction, Wells Fargo Securities, IHS-Global Insight, Moody’s economy.com, Reed Business Information, Associated Builders & Contractors, and FMI. Its purpose is to project business conditions in the construction industry over the coming 12 to 18 months.
