AIA: Significant Increase in Nonresidential Construction Activity Expected in 2007
Following a growth of 6 percent in 2006, the nonresidential construction market is expected to increase by 7 percent in 2007 in inflation adjusted terms, according to the American Institute of Architects.
Following a growth of 6 percent in 2006, the nonresidential construction market is expected to increase by 7 percent in 2007 in inflation adjusted terms, according to the American Institute of Architects.
With balanced growth in the commercial / industrial and institution sectors, strong construction activity is projected in office buildings, hotels and health care facilities.
These are highlights from The American Institute of Architects (AIA) semi-annual
Consensus Construction Forecast , a survey of the nation’s leading construction forecasters. If the projection holds, 2006-2007 would be the best two-year period for the industry since the late 1990’s, AIA says.
“Unless there is a significant downturn in the overall U.S. economy, the prospects for nonresidential construction activity are very favorable,” says AIA Chief Economist, Kermit Baker. “The high level of projected activity will help offset some of the effects of the slumping residential market."
2007 Market Segment Consensus Growth Forecasts
Commercial/ Industrial
• Hotels: 13.1 percent
• Office buildings: 9 percent
• Retail: 3.5 percent
• Industrial: 5.4 percent
Institutional
• Hospitals and health care: 6.8 percent
• Public safety: 4.5 percent
• Education: 4.2 percent
• Religious: 2.6 percent
• Amusement / recreation: 9.9 percent
Baker added, “Oil prices have been moderating, and the large spikes in building material costs seem to behind us for this cycle. However, prices for asphalt, copper, steel, aluminum and cement remain much higher than a year ago. If inflation in the broader economy remains under control, and the economy stays in a slow-growth mode, that could lead to a reduction to short-term interest rates.”
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