After a strong 2015, there is a growing sense that the construction industry expansion will be more tempered over the next 18 months. However, continued strong demand for hotels, office space, and amusement and recreation spaces will ensure continued growth in the overall construction spending market over this time period.
The American Institute of Architects’ (AIA) semi-annual Consensus Construction Forecast, a survey of the nation’s leading construction forecasters, is projecting that spending will increase just less than 6% for 2016, with next year’s projection being an additional 5.6% gain.
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“Healthy job growth, strong consumer confidence and low interest rates are several positive factors in the economy, which will allow some of the pent-up demand from the last downturn to go forward,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “But at the same time, the slowing in the overall economy could extend to the construction industry a bit – with the biggest drop off expected in the industrial facility sector over the next year and a half.”
Baker added, “The issues that could derail continued expansion in the construction sector include: weak U.S. manufacturing output, struggling economies in key international markets, the ripple effect from the Brexit decision, and the typical uncertainty leading up to a U.S. presidential election that results in reluctant investors.”