The nonresidential building market was hamstrung by weather-related delays during the first part of the 2014, but conditions improved dramatically throughout the rest of the year to finish with greater than anticipated spending levels. The commercial construction sector is now looking at double-digit increases in 2015, led by vigorous levels of demand for hotels and office buildings.
The American Institute of Architects’ (AIA) semi-annual Consensus Construction Forecast, a survey of the nation’s leading construction forecasters, is projecting that spending will see a 7.7% increase in 2015, with next year’s projection nudging up to 8.2%.
VIDEO: Q1 2015 Economic Forecast
“This is the first time since the Great Recession that every major building category is projected to see increases in spending,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “But by far, the most significant driver that will fuel greater expansion in the marketplace is the revival in the institutional sector, especially with growing demand for new healthcare and education facilities, which alone traditionally account for a third of spending on new building construction.”
Baker continued, “The overall construction industry appears to be on very solid ground for the next two years. That said, uncertainties in international economies, potential labor shortages, lower energy costs, rising interest rates and construction costs all are factors that we will be watching closely to see how they may adversely impact the marketplace.”
Market Segment Consensus Growth Forecasts
Overall nonresidential building
2015: 7.7%
2016: 8.2%
Commercial/industrial
2015: 11.8%
2016: 10.4%
Hotels
2015: 15.3%
2016: 10.4%
Office buildings
2015: 12.9%
2016: 11.5%
Industrial facilities
2015: 10.5%
2016: 10.1%
Retail
2015: 10.1%
2016: 9.0%
Institutional
2015: 5.0%
2016: 5.4%
Amusement/recreation
2015: 9.1%
2016: 5.3%
Education
2015: 4.7%
2016: 5.2%
Healthcare facilities
2015: 4.7%
2016: 6.2%
Public safety
2015: 1.7%
2016: 3.6%
Religious
2015: 1.2%
2016: 3.6%
About the AIA Consensus Construction Forecast Panel
The 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. The purpose of the Consensus Construction Forecast Panel is to project business conditions in the construction industry over the coming 12 to 18 months. The Consensus Construction Forecast Panel has been conducted for 16 years.
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