Late last month the AIA released a report indicating that nonresidential construction is projected to increase by approximately 5% this year. While the recovery of both residential and nonresidential construction markets continues to grow slowly, the indication that it is steadily increasing marks a sense of security or stability that owners are beginning to identify in the economy. In the commercial / industrial sectors, hotels are seeing the largest projected growth at 15.7%, with retail and office buildings hovering between a 7 to 8% growth rate. In the institutional sector, construction growth is projected to be highest in health care facilities, which is expected to rise by 4.4%, while public safety spending is expected to decline in 2013.
More on the report after the break.
Compared to last year's report, this year's numbers are optimistic. Some projections from last year for 2013, exceed this year's projections, specifically in the commercial sector, but indicates more confidence in the institutional sector.
AIA Chief Economist, Kermit Baker, PhD, Hon. AIA credits the growth in residential construction for having a ripple effect on commercial sectors of construction. He warns, however, "We can’t truly think the design and construction industry is completely out of the woods until the continued uncertainty over federal budget and debt issues is resolved. This has caused enough anxiety in the real estate marketplace that has resulted in numerous delays and even cancellations of active construction projects."
Stalled projects are a nightmarish consequence of an unstable economy, but the report indicates confidence in the recovery of the construction industry at a slow - but steady - pace.