After a strong 2015, there is a growing sense that the construction industry expansion will be more tempered over the next eighteen months. However, continued strong demand for hotels, office space, and amusement and recreation spaces will ensure continued growth in the overall construction spending market over this time period.
The American Institute of Architects’ (AIA) semi-annual Consensus Construction Forecast, a survey of the nation’s leading construction forecasters, is projecting that spending will increase just less than six percent for 2016, with next year’s projection being an additional 5.6% gain.
INFOGRAPHIC: To see each of the panelist’s projections, click here.
“Healthy job growth, strong consumer confidence and low interest rates are several positive factors in the economy, which will allow some of the pent-up demand from the last downturn to go forward,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “But at the same time, the slowing in the overall economy could extend to the construction industry a bit – with the biggest drop off expected in the industrial facility sector over the next year and a half.”
| Market Segment Consensus Growth Forecasts | 2016 | 2017 |
| Overall nonresidential building | 5.8% | 5.6% |
| Commercial / industrial | 11.7 % | 6.5% |
| Hotels | 17.9% | 7.6% |
| Office space | 14.7% | 7.5% |
| Retail | 7.4% | 5.2% |
| Industrial facilities | -2.1% | 2.9% |
| Institutional | 6.7% | 6.7% |
| Amusement / recreation | 10.0% | 5.7% |
| Education | 6.5% | 6.3% |
| Healthcare facilities | 2.3% | 5.0% |
| Religious | -0.4% | 1.9% |
| Public safety | -3.7% | 3.3% |
Baker added, “The issues that could derail continued expansion in the construction sector include: weak U.S. manufacturing output, struggling economies in key international markets, the ripple effect from the Brexit decision, and the typical uncertainty leading up to a U.S. presidential election that results in reluctant investors.”
About the AIA Consensus Construction Forecast Panel
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, ConstructConnect, 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.
About The American Institute of Architects
Founded in 1857, the American Institute of Architects consistently works to create more valuable, healthy, secure, and sustainable buildings, neighborhoods, and communities. Through nearly 300 state and local chapters, the AIA advocates for public policies that promote economic vitality and public wellbeing. Members adhere to a code of ethics and conduct to ensure the highest professional standards. The AIA provides members with tools and resources to assist them in their careers and business as well as engaging civic and government leaders and the public to find solutions to pressing issues facing our communities, institutions, nation and world. Visit www.aia.org.
