The nonresidential sector that looks to have maintained the most momentum is commercial/industrial facilities. Architecture firms specializing in this sector had reported growth in billings for the second half of 2011 and the first four months of this year, with healthy growth for most of this period. With the recent downturn in the national index, the commercial/industrial component has seen slower growth, and has only very recently retreated into negative territory.
In contrast, firms concentrating on institutional facilities have seen much weaker design activity. Other than this past December and January, when the institutional design index was modestly positive, there have been steady declines in this sector for the past several quarters. Given the normal lag between design activity and construction activity for institutional buildings, this would indicate that there is unlikely to be much of any recovery in this sector this year.
A hesitant recovery emerges
In spite of all the headwinds facing the construction industry, the consensus is that there will be some gains in nonresidential construction spending in 2012, and stronger growth moving into 2013. All members of the AIA Consensus Construction Forecast Panel are expecting modest gains in nonresidential construction spending this year, with a consensus of growth between 4 and 5 percent. Likewise, all panelists are expecting the nonresidential construction upturn to continue into 2013, with spending gains to increase by 6 percent.
As seen with the ABI, stronger growth is anticipated for commercial and industrial facilities. All the panelists are expecting at least modest growth in spending for these facilities both this year and next. The consensus is for a 6 percent increase this year for commercial facilities and somewhat more for industrial facilities. Next year, growth for commercial buildings is projected to accelerate to 10 percent, with the industrial sector expected to see a more moderate gain of 8 percent.
The institutional upturn is forecast to be much more modest. Hardly any increase is expected this year, and the consensus for next year’s gain is just 3 percent. Healthcare is expected to generate most of the improvement in institutional spending, with this year’s 4 percent spending gains nearly doubling to just under 8 percent next year. Education construction, suffering from the dire fiscal situation of many state and local governments, is expected to see almost no growth this year or next.