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Non-Residential Construction To Be Robust Through 2007, Architect Panel Forecasts
Despite nagging concerns about the overall U.S. economic outlook, an American Institute of Architects panel predicts robust growth in the non-residential construction market through 2007, according to an on-line article by AIA Chief Economist Kermit Baker.
The AIA Consensus Forecast Panel anticipates a 6.3% increase in non-residential construction for this year, with another 6.2% growth in 2007. Both figures are adjusted for inflation. Further, the panel expects the growth to be balanced between the commercial/industrial and institutional segments of the market. If this rate of growth is achieved, it will be the best two-year period in non-residential construction since 1997-98, Baker writes.
The panel cites higher short-term interest rates, price increases in construction materials—copper was up some 85% in the 12 months preceding mid-year—a softer job market and higher oil prices as potential problems for the economic outlook. None the less, the non-residential construction outlook is positive throughout the U.S.
Highlights from the panel include:
Commercial construction is forecast to gain an inflation-adjusted 5% this year and next.
Industrial construction is forecast to increase a net 17% in 2006 and 7.5% additionally in 2007.
Office construction will continue to benefit from falling office vacancy rates across the country.
The retail construction outlook is for 4% net gains this year and in 2007.
Hotel construction is predicted to increase 11% this year, followed by another 6.5% growth in 2007.
Education construction is forecast to increase 4.4% in 2006 and 7.4% next year.
The panel predicts health care construction will grow by 6.3% this year and an additional 5% next year.
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