AIA Lowers Construction Forecast for 2013

AIA Lowers Construction Forecast for 2013

Commercial News » North America Commercial News Edition | By WPJ Staff | July 31, 2013 11:38 AM ET

The American Institute of Architects has scaled back its construction forecasts for the U.S. after conducting its semi-annual poll of construction forecasters.

The group now predicts that overall non-residential construction spending will increase 2.3 percent in 2013, down from the 5 percent growth forecast in January. But the group raised the predicted growth in 2014 to 7.6 percent, up from 7.2 percent predicted in January.

"A disappointing recovery of the U.S. economy is limiting need for new nonresidential building activity," said AIA chief economist, Kermit Baker. "Optimism for a stronger performance next year is based on the recent increase in domestic energy production, the boost to the general economy from a resurgent housing market, and improving employment figures that should help drive demand in the design and construction sectors."

The projected growth in commercial and industrial projects remains unchanged, with an increase of 8.5 percent expected in 2013 and an 11.5 percent jump in 2014. The sector is expected to get a boost from a 17 percent increase in hotel development and an 8.2 percent increase in retail construction.

But institutional projects, which were expected to grow a modest 1.2 percent in 2013, are now forecast to drop 1.8 percent in 2013, according to the AIA's survey. Public safety projects are expected to drop 4.8 percent and education construction will slide 2.5 percent, the study suggests.

The list of "construction forecasters" surveyed includes McGraw Hill Construction, Wells Fargo Securities, IHS-Global Insight, Moody's, Reed Business Information, Associated Builders & Contractors and FMI.

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