Washington, D.C., January 16,
2008 — Weakness in the overall U.S. economy is translating to a
tempered forecast for the nonresidential construction market, and
spending is expected to increase by a modest 0.7 percent in 2008 in
inflation adjusted terms. Led by demand for institutional projects,
the growth in 2008 is expected to be at a slower pace than recent
years, with commercial projects likely to see the most decrease.
Also there is expected to be continued volatility in the costs of
building materials. These are highlights from the American
Institute of Architects (AIA) semi-annual Consensus Construction
Forecast, a survey of the nation’s leading construction
forecasters.
“After ending 2007 on a high note, we are anticipating a
significant slowing of nonresidential construction growth in
2008,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA.
“A slight decrease in activity is actually expected in 2009
with 2008 and 2009 projected to be the trough of the current
construction cycle.”
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report
Market Segment Consensus Growth
Forecasts
| Commercial / industrial
|
2008 |
2009 |
| • Hotels |
5.1% |
-3.1% |
| • Office buildings |
1.7% |
-3.7% |
| • Industrial facilities |
-3.8% |
0.4% |
| • Retail |
-5.7% |
-3.6% |
| Institutional |
|
|
| • Health care facilities |
5.6% |
3.6% |
| • Education |
5.5% |
-0.1% |
| • Public safety |
3.5% |
0.4% |
| • Amusement / recreation |
1.4% |
-2.6% |
| • Religious |
-1.0% |
4.0% |
“Oil prices in the $100 per barrel range are not the only
construction material input that is experiencing unusual price
fluctuations. Iron and steel scrap have increased more than 28
percent between 2006 and 2007, with construction
sand/gravel/crushed stone up over 8 percent, selected steel
products up almost 6 percent and fabricated structural metal
increased more than 5 percent during the same period,” Baker
added. “Conversely, gypsum products are down more 23 percent
over the past year, with prices for insulation, plywood, aluminum
and natural gas lowering a bit as well.”
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, McGraw Hill Construction, Global
Insight, Moody’s economy.com, Reed Business Information, FMI,
and the Portland Cement Association. The purpose of the Consensus
Construction Forecast Panel is to project business condition in the
construction industry over the coming 12 to 18 months. The
Consensus Construction Forecast Panel has been conducted for 10
years.
About The American Institute of
Architects
For 150 years, members of The American Institute of Architects have
worked with each other and their communities to create more
valuable, healthy, secure, and sustainable buildings and
cityscapes. AIA members have access to the right people, knowledge,
and tools to create better design, and through such resources and
access, they help clients and communities make their visions real.
www.aia.org
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