Hotels, healthcare facilities, and schools to see the most growth
Despite the continued sagging housing industry, the nonresidential construction market has shown solid gains this year and spending is expected to increase by 7.2% in 2007 in inflation adjusted terms, following the growth of near six percent in 2006. Led by heavy demand for institutional projects, the growth in 2008 is expected to be at a slower pace, closer to a three percent gain in total activity. These are highlights from The American Institute of Architects (AIA) semi-annual Consensus Construction Forecast, a survey of the nation’s leading construction forecasters.
“Construction activity in the nonresidential market has been robust this year so far, even exceeding the optimistic projections at the beginning of the year,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “This pattern should continue for the rest of the year, with more tempered growth moving into 2008.”
Market Segment Consensus Growth Forecasts:
Commercial / industrial 2007 2008
Hotels 26.4% 1.3%
Office buildings 11.2% 3.5%
Industrial facilities 6.5% 5.2%
Retail 3.7% -0.9%
Institutional
Health care facilities 8.5% 5.0%
Public safety 8.6% 3.3%
Education 5.9% 4.1%
Amusement / recreation 4.2% 2.7%
Religious 1.3% 4.3%
Baker added, “As activity in the commercial market abates, the institutional sector is projected to see stable growth. The good financial position of state and local governments should support continued growth in the construction of schools, and health care facility construction has become the fastest growing institutional category based on several state mandates for universal or near-universal coverage.”
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, Global Insight, Moody’s economy.com, Reed Business Information, FMI, and the Portland Cement Association. The purpose of the Consensus Construction Forecast Panel is to project business condition in the construction industry over the coming 12 to 18 months. The Consensus Construction Forecast Panel has been conducted for almost 10 years.
About The American Institute of Architects
For 150 years, members of The American Institute of Architects have worked with each other and their communities to create more valuable, healthy, secure, and sustainable buildings and cityscapes.