Hotel, Office Building Demand Forecast to Lead Another Strong Couple of Years for U.S. Nonresidential Construction
After dipping into negative territory in January, the Architecture Billings Index (ABI) clawed back into expansion mode last month, led by strength in the multifamily, commercial and industrial design projects.
The American Institute of Architects reported the February ABI score at 50.3, up slightly from the mark of 49.6 the previous month, while index measuring inquiries into new projects was 59.5 last month, up from 55.3 in January.
Multifamily residential design led the building categories with an index of 53 in February, followed by commercial/industrial at 52.3. The South posted the strongest number among U.S. regions at 51.1, followed by the West at 49.9.
AIA Chief Economist Kermit Baker noted that March and April are traditionally the busiest months for architecture firms, which should give an idea of the direction of the momentum for future construction projects late this year and into 2017.
Also, "hopefully the relatively mild weather conditions recently in most parts of the country will help design and construction activity move ahead at a somewhat faster pace," Baker said.
If forecasts bear out, both 2016 and 2017 should see continued strength in the construction industry after last year's unexpectedly strong numbers, according AIA's recent semi-annual Construction Consensus Forecast, which factors in projections from Wells Fargo, Moody's and other economic forecasters.
Nonresidential construction spending is expected to increase by just over 8% this year and by another 6.7% in 2017, led by heavy supply demand for hotels, offices, manufacturing facilities and entertainment and retail uses, the consensus forecast said.