Nonresidential Construction Market Momentum to Continue

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Construction spending greatly exceeded expectations in the nonresidential market in 2015, and this year should see healthy growth levels as well, agree all of the members of the American Institute of Architects Consensus Forecast Panel. There continues to be significant demand for hotels, office space, manufacturing facilities and amusement and recreation spaces.

The American Institute of Architects’ (AIA) semi­annual Consensus Construction Forecast, a survey of the nation’s leading construction forecasters, is projecting that spending will increase just more than eight percent in 2016, with next year’s projection being an additional 6.7% gain. Leading the way will be double-digit growth in hotels, office space, industrial facilities, and amusement & recreational facilities.

“While rising interest rates could pose a challenge to the U.S. economy, lower energy prices, improved employment figures and an enacted federal budget for 2016 are all factoring into a very favorable outlook for the construction industry,” said AIA Chief Economist, Kermit Baker. “And after several years of challenging economic circumstances the institutional project sector is finally on very solid footing.”

Market Segment Consensus Growth Forecasts          2016     2017

  • Overall nonresidential building                                         8.3%      6.7%
  • Commercial / industrial                                                      9.9%      7.5%
  • Hotels                                                                                    14.8%     7.8%
  • Office space                                                                          12.8%      8.8%
  • Industrial facilities                                                              11.9%      5.3%
  • Retail                                                                                       7.5%      5.6%
  • Institutional                                                                          6.7%      6.7%
  • Amusement / recreation                                                  11.2%       7.7%
  • Healthcare facilities                                                           6.6%       6.9%
  • Education                                                                             6.5%       6.6%
  • Religious                                                                               2.6%       4.0%
  • Public safety                                                                        1.8%       4.2%

The Consensus Construction Forecast Panel consists of economists from Dodge Data & Analytics, Wells Fargo Securities, IHS­Global Insight, Moody’s economy.com, CMD Group, Associated Builders & Contractors and FMI.

To see each of the individual forecasts, follow the link: http://info.aia.org/aiarchitect/2016/charts/jan2016/ccf_012916.html

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