Even with the myriad of obstacles preventing a full scale recovery for the overall U.S. economy, the design and construction industry appears to have reasons to be at least modestly optimistic in the coming months and into next year.
A sharp spike in demand for industrial facilities so far this year, along with sustained demand for hotels and retail projects factors into what projects to be a 4.4% rise in spending this year for nonresidential construction projects – up from a projection of a 2.1% increase in the January Consensus Forecast.
The American Institute of Architects (AIA) semi-annual Consensus Construction Forecast, a survey of the nation’s leading construction forecasters, also projects a 6.2% increase of spending in 2013.
“With companies looking to bring back manufacturing jobs from overseas, there has been a sharp rise in demand for industrial facilities, which is leading to an upward revision in projections for future construction spending,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “Continued budget shortfalls at the state and local level, along with a depressed municipal bond market are holding the institutional market back from seeing similar upticks in spending.”
|
Market Segment Consensus Growth Forecasts |
2012 |
2013 |
|
Overall nonresidential |
4.4% |
6.20% |
|
Commercial / industrial |
5.7% |
10.20% |
|
Industrial |
12.9% |
8.10% |
|
Hotels |
9.5% |
18.20% |
|
Retail |
6.2% |
9.00% |
|
Office buildings |
4.7% |
8.70% |
|
Institutional |
0.7% |
3.00% |
|
Healthcare facilities |
4.0% |
7.50% |
|
Education |
0.3% |
1.10% |
|
Amusement / recreation |
0.1% |
2.30% |
|
Public safety |
0.0% |
0.10% |
|
Religious |
-5.0% |
3.00% |
Remarking on what risks exist that could undermine these projections, Baker added, “Federal tax and spending changes – the so-called fiscal cliff – that may come into play in early 2013 could upset the economic applecart and prove detrimental to recovery possibilities. We will likely have a better sense after the presidential election what will happen with regards to the Bush-era tax cuts, Social Security payroll tax, extended unemployment, and deficit reduction plans that will have a ripple effect that will extend to the construction industry.” +
Related Stories
Adaptive Reuse | Oct 22, 2024
Adaptive reuse project transforms 1840s-era mill building into rental housing
A recently opened multifamily property in Lawrence, Mass., is an adaptive reuse of an 1840s-era mill building. Stone Mill Lofts is one of the first all-electric mixed-income multifamily properties in Massachusetts. The all-electric building meets ambitious modern energy codes and stringent National Park Service historic preservation guidelines.
MFPRO+ News | Oct 22, 2024
Project financing tempers robust demand for multifamily housing
AEC Giants with multifamily practices report that the sector has been struggling over the past year, despite the high demand for housing, especially affordable products.
Performing Arts Centers | Oct 21, 2024
The New Jersey Performing Arts Center breaks ground on $336 million redevelopment of its 12-acre campus
In Newark, N.J., the New Jersey Performing Arts Center (NJPAC) has broken grown on the three-year, $336 million redevelopment of its 12-acre campus. The project will provide downtown Newark 350 mixed-income residential units, along with shops, restaurants, outdoor gathering spaces, and an education and community center with professional rehearsal spaces.
Office Buildings | Oct 21, 2024
3 surprises impacting the return to the office
This blog series exploring Gensler's Workplace Survey shows the top three surprises uncovered in the return to the office.
Healthcare Facilities | Oct 18, 2024
7 design lessons for future-proofing academic medical centers
HOK’s Paul Strohm and Scott Rawlings and Indiana University Health’s Jim Mladucky share strategies for planning and designing academic medical centers that remain impactful for generations to come.
Sports and Recreational Facilities | Oct 17, 2024
In the NIL era, colleges and universities are stepping up their sports facilities game
NIL policies have raised expectations among student-athletes about the quality of sports training and performing facilities, in ways that present new opportunities for AEC firms.
Codes and Standards | Oct 17, 2024
Austin, Texas, adopts AI-driven building permit software
After a successful pilot program, Austin has adopted AI-driven building permit software to speed up the building permitting process.
Resiliency | Oct 17, 2024
U.S. is reducing floodplain development in most areas
The perception that the U.S. has not been able to curb development in flood-prone areas is mostly inaccurate, according to new research from climate adaptation experts. A national survey of floodplain development between 2001 and 2019 found that fewer structures were built in floodplains than might be expected if cities were building at random.
Seismic Design | Oct 17, 2024
Calif. governor signs limited extension to hospital seismic retrofit mandate
Some California hospitals will have three additional years to comply with the state’s seismic retrofit mandate, after Gov. Gavin Newsom signed a bill extending the 2030 deadline.
MFPRO+ News | Oct 16, 2024
One-third of young adults say hurricanes like Helene and Milton will impact where they choose to live
Nearly one-third of U.S. residents between 18 and 34 years old say they are reconsidering where they want to move after seeing the damage wrought by Hurricane Helene, according to a Redfin report. About 15% of those over age 35 echoed their younger cohort’s sentiment.
