AIA Survey Predicts 7.2 Percent Increase in 2013 Nonresidential Spending


Growing at a faster rate than the overall U.S. economy, the nonresidential construction industry is expected to see solid, yet measured, increases in activity this year.  High demand for hotels and retail projects have the commercial sector pacing  what projects to be a rise in spending this year for nonresidential construction projects of 5.0% – up from a projection of a 4.4% increase in the July 2012 forecast.

The American Institute of Architects (AIA) semi-annual Consensus Construction Forecast , a survey of the nation’s leading construction forecasters, also projects a 7.2%% increase of spending in 2014.

“After seeing construction activity seesaw for much of last year, there is a much stronger sense that we have entered a recovery phase and the industry is positioned to see continued economic improvement as we move through year and into 2014,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “The resurgent housing market has led to a ripple effect where there is a need for more retail establishments and office buildings across the country.”

Market Segment Consensus Growth Forecasts 2013 2014
Overall nonresidential 5.0% 7.2%
Commercial / industrial 8.6% 10.7%
Hotels 15.7% 12.6%
Retail 7.8% 9.6%
Office buildings 7.3% 11.4%
Industrial facilities 5.0% 6.4%
Institutional 1.2% 4.7%
Healthcare facilities 4.4% 4.8%
Religious 2.6% 4.9%
Education 1.1% 4.5%
Amusement / recreation 1.8% 5.5%
Public safety -1.7% 0.8%

Remarking on what could undermine this forecast, Baker added, “We can’t truly think the design and construction industry is completely out of the woods until the continued uncertainty over federal budget and debt issues is resolved.  This has caused enough anxiety in the real estate marketplace that has resulted in numerous delays and even cancelations of active construction projects.  More than one quarter of architecture firms are reporting that this tenuous situation is a tremendous concern to clients and may lead to more delays or project terminations.”  Read More.