Big Increase in Nonresidential Construction Expect

Washington, DC, January 29, 2007--The nonresidential construction market is expected to increase by almost seven percent in 2007 in inflation adjusted terms, following the growth of near six percent in 2006. With balanced growth in the commercial/industrial and institution sectors, strong construction activity is projected in office buildings, hotels and health care facilities. These are highlights from The American Institute of Architects (AIA) semi-annual Consensus Construction Forecast, a survey of the nation’s leading construction forecasters. If this projection is accurate, 2006-2007 would be the best two-year period for the industry since the late 1990’s. “Unless there is a significant downturn in the overall U.S. economy, the prospects for nonresidential construction activity are very favorable,” said AIA chief economist, Kermit Baker, PhD, Hon. AIA. “The high level of projected activity will help offset some of the effects of the slumping residential market." 2007 Market Segment Consensus Growth Forecasts Commercial/ Industrial • Hotels: 13.1% • Office buildings: 9% • Retail: 3.5% • Industrial: 5.4% Institutional • Hospitals and health care: 6.8% • Public safety: 4.5% • Education: 4.2% • Religious: 2.6% • Amusement / recreation: 9.9% Baker added, “Oil prices have been moderating, and the large spikes in building material costs seem to behind us for this cycle. However, prices for asphalt, copper, steel, aluminum and cement remain much higher than a year ago. If inflation in the broader economy remains under control, and the economy stays in a slow-growth mode, that could lead to a reduction to short-term interest rates.” Link to full report: http://www.aia.org/aiarchitect/thisweek07/0126/0126b_econforecast.cfm

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