Monday, August 3rd, 2015 by John Phillips
Nonresidential construction could reach $360 billion this year, an increase of 8.9% year-over-year, according to the Consensus Construction Forecast from the American Institute of Architects. The group predicts that could rise further -- to nearly $390 billion in 2016. Manufacturing, hotel and office building are contributing significantly to the increase. Overall spending on commercial construction — particularly for industrial facilities, offices and hotels — is up, while overall spending for institutional construction — particularly for public safety and religious facilities — is down.
The American Institute of Architects’ released Wednesday its Consensus Construction Forecast, showing healthy grow is expected for commercial construction this year. Despite adverse weather conditions that curtailed construction in the first quarter, the overall construction market is performing well to date, with total spending on commercial building increasing more than 7 percent for the year. “Buoyed mostly by the red-hot commercial sector, spending on nonresidential buildings should be close to $360 billion this year, approaching $390 billion in 2016,” said AIA chief economist Kermit Baker. “But the demographic factors that are also fueling heavy demand for health care and education facilities are going to lead to a more balanced construction market in the foreseeable future.”
The forecast projects spending will increase by nearly 9 percent in 2015, and by 8.2 percent next year. The greatest amount of activity was seen in the building of commercial properties — most notably, offices and hotels — with an unusually high spike in manufacturing construction spending triggered by the surge in domestic oil and natural gas production, AIA said. Institutional spending, while in the red this year, is forecasted to make greater gains next year with a nearly 3 percent increase. AIA’s semi-annual forecast surveys some of the nation’s leading construction forecasters to project growth.
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