Construction spending on buildings is projected to increase just over nine percent this year and another six percent in 2023, according to a new report from the American Institute of Architects (AIA).
While the outlook for the broader economy has become more uncertain, the prospects for construction spending have improved since the beginning of the year. The outlook from the AIA Consensus Construction Forecast Panel, in its mid-year update, is more optimistic than what was projected at the beginning of the year, largely due to the extremely strong gains in the manufacturing category, as well as surprising strength in retail facilities. The industrial market is expected to pace the building construction upturn this year and next, while the institutional sector is forecast to begin its recovery this year and accelerate moving into 2023.
“The construction industry is not without its own set of challenges,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “Supply chain disruptions coupled with general inflation has pushed up inputs to construction by almost 15 percent over the past year. However, challenges to the economy and the construction industry notwithstanding, the outlook for the nonresidential building market appears promising for this year and next.”
Related Stories
Market Data | Jun 14, 2016
Transwestern: Market fundamentals and global stimulus driving economic growth
A new report from commercial real estate firm Transwestern indicates steady progress for the U.S. economy. Consistent job gains, wage growth, and consumer spending have offset declining corporate profits, and global stimulus plans appear to be effective.
Market Data | Jun 7, 2016
Global construction disputes took longer to resolve in 2015
The good news: the length and value of disputes in the U.S. fell last year, according to latest Arcadis report.
Market Data | Jun 3, 2016
JLL report: Retail renovation drives construction growth in 2016
Retail construction projects were up nearly 25% year-over-year, and the industrial and office construction sectors fared well, too. Economic uncertainty looms over everything, however.
Market Data | Jun 2, 2016
ABC: Nonresidential construction spending down in April
Lower building material prices, a sluggish U.S. economy, and hesitation among private developers all factor into the 2.1% drop.
Market Data | May 20, 2016
Report: Urban area population growth slows
Older Millennials are looking to buy homes and move away to more affordable suburbs and exurbs.
Market Data | May 17, 2016
Modest growth for AIA’s Architecture Billings Index in April
The American Institute of Architects reported the April ABI score was 50.6, down from the mark of 51.9 in the previous month. This score still reflects an increase in design services.
Market Data | Apr 29, 2016
ABC: Quarterly GDP growth slowest in two years
Bureau of Economic Analysis data indicates that the U.S. output is barely growing and that nonresidential investment is down.
Market Data | Apr 20, 2016
AIA: Architecture Billings Index ends first quarter on upswing
The multi-family residential sector fared the best. The Midwest was the only U.S. region that didn't see an increase in billings.
Building Technology | Apr 11, 2016
A nascent commercial wireless sensor market is poised to ascend in the next decade
Europe and Asia will propel that growth, according to a new report from Navigant.
Industry Research | Apr 7, 2016
CBRE provides latest insight into healthcare real estate investors’ strategies
Survey respondents are targeting smaller acquisitions, at a time when market cap rates are narrowing for different product types.
