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      Slight Increase in Nonresidential Construction Spending Expected in 2012 with Substantial Growth Projected for 2013

      Commercial sector expected to lead real estate recovery

      For immediate release:
      Washington, D.C. – January 25, 2012 –
      Despite the lingering effects of an over-built housing market, the continued difficulty to obtain financing for real estate projects, budget shortfalls at state and municipal governments and the anxiety surrounding the prolonged European debt crisis, there are signs that the U.S. design and construction industry will be improving. Corporate profits have returned to pre-recession levels and businesses have subsequently been increasing their capital spending, borrowing costs are at record low levels and pent up demand for commercial and retail projects factors into what projects to be a 2.1% rise in spending this year for nonresidential construction projects. The American Institute of Architects (AIA) semi-annual Consensus Construction Forecast, a survey of the nation’s leading construction forecasters, also projects a 6.4% increase of spending in 2013.

      “Spending on hotels, industrial plants and commercial properties are going to set the pace for the construction industry over the next two years,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “The institutional market won’t experience the same growth, but healthcare facilities and places of worship are poised for a positive economic outlook in that sector.”

    Market Segment Consensus Growth Forecasts

    2012

    2013

    Overall nonresidential

    2.1%

    6.4%

    Commercial / industrial

    5.6%

    11.4%

        • Hotels

    10.2%

    19.7%

        • Industrial

    6.0%

    10.2%

        • Retail

    5.0%

    9.9%

        • Office buildings

    4.3%

    9.6%

         

    Institutional

    -0.1%

    3.6%

        • Religious

    5.1%

    6.3%

        • Healthcare facilities

    4.5%

    5.3%

        • Amusement / recreation

    0.2%

    6.5%

        • Education

    -1.7%

    3.1%

        • Public safety

    -3.8%

    0.3%

      Remarking on what could derail a positive turnaround, Baker added, “We are concerned that the unusually high energy costs, given the overall weakness in the economy, might trigger a jolt in inflation and hamstring economic recovery. The housing market also needs prices to stabilize and to resolve the high number of delinquencies and foreclosures before it can fully recover.”

      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, IHS-Global Insight, Moody’s economy.com, Reed Business Information, 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 13 years.

      About The American Institute of Architects
      For over 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. Members adhere to a code of ethics and professional conduct to ensure the highest standards in professional practice. Embracing their responsibility to serve society, AIA members engage civic and government leaders and the public in helping find needed solutions to pressing issues facing our communities, institutions, nation and world. Visit www.aia.org. Twitter: http://twitter.com/AIA_Media

      Facebook: http://www.facebook.com/#!/AIANational

 

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