Construction spending greatly exceeded expectations in the nonresidential market in 2015, and this year should see healthy growth levels as well. The American Institute of Architects’ (AIA) semi-annual Consensus Construction Forecast is projecting that spending will increase just more than 8% in 2016, with next year’s projection being an additional 6.7% gain.
There continues to be significant demand for hotels, office space, manufacturing facilities, and amusement and recreation spaces.
“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, PhD, Hon. AIA. “And after several years of challenging economic circumstances the institutional project sector is finally on very solid footing.”
Market Segment Consensus Growth Forecasts for 2016 & 2017
- Overall nonresidential building - 8.3% (2016); 6.7% (2017)
- Commercial/industrial - 9.9% (2016); 7.7% (2017)
- Hotels - 14.8% (2016); 7.8% (2017)
- Office space - 12.8% (2016); 8.8% (2017)
- Industrial facilities - 11.9% (2016); 5.3% (2017)
- Retail - 7.5% (2016); 5.6% (2017)
- Institutional - 6.7% (2016); 6.7% (2017)
- Amusement/recreation - 11.2% (2016); 7.7% (2017)
- Healthcare facilities - 6.6% (2016); 6.9% (2017)
- Education - 6.5% (2016); 6.6% (2017)
- Religious - 2.6% (2016); 4% (2017)
- Public safety - 1.8% (2016); 4.2% (2017)
The AIA Consensus Construction Forecast Panel is conducted twice a year with the leading nonresidential construction forecasters in the United States including, Dodge Data & Analytics, Wells Fargo Securities, IHS-Global Insight, Moody’s economy.com, CMD Group, Associated Builders & Contractors and FMI. The purpose of the Consensus Construction Forecast Panel is to project business conditions in the construction industry over the coming 12 to 18 months. The Consensus Construction Forecast Panel has been conducted for 17 years.
