Economist Forecasts a Bright Year for Nonresidential Construction


Nonresidential building construction has begun to expand, and the next three years should be good, said Jim Haughey, Ph.D., director of economics for Reed Business Information. Haughey delivered his forecast last week at Reed Construction Data’s 10th annual CEO Breakfast, held in conjunction with the Construction Specifications Institute’s national show in Chicago.

Haughey pointed to a number of economic indicators that bode well for the U.S. economy in general and for the construction industry in particular. For instance, GDP growth has been and should continue to be above average for some years to come. Moreover, business inventories are leaner than they ever have been in the U.S., he said—an important incentive to growth, while the cost of money remains relatively low. “Twelve months of credit-tightening by the federal reserve has raised short-term rates,” said Haughey, “but has raised long-term rates very little.”

With respect to the nonresidential construction market in particular, Haughey pointed out that the commercial office market looks good, because the spare building capacity built up in the last three years is finally disappearing. Office construction is expected to increase 9.7% during 2005, while the commercial market generally should advance 4.8%.

One of the hot markets for 2005 will be hospitality, or more specifically lodging, with a projected 25.1% increase. One driver in this market, suggested Haughey, is the growing strength of the Euro leading to more visitors from Europe.

One final note is that much of the expansion of the next few years will be driven by the private sector. Less money is coming from the federal government, and expansion has been strongest overall in the private for-lease market (lodging, office, retail, warehouse) due to an unusually favorable commercial real estate financial market.

Product of the Year
Consulting-Specifying Engineer's Product of the Year (POY) contest is the premier award for new products in the HVAC, fire, electrical, and...
40 Under Forty: Get Recognized
Consulting-Specifying Engineer magazine is dedicated to encouraging and recognizing the most talented young individuals...
MEP Giants Program
The MEP Giants program lists the top mechanical, electrical, plumbing, and fire protection engineering firms in the United States.
November 2018
Emergency power requirements, salary survey results, lighting controls, fire pumps, healthcare facilities, and more
October 2018
Approaches to building engineering, 2018 Commissioning Giants, integrated project delivery, improving construction efficiency, an IPD primer, collaborative projects, NFPA 13 sprinkler systems.
September 2018
Power boiler control, Product of the Year, power generation,and integration and interoperability
Data Centers: Impacts of Climate and Cooling Technology
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
Safety First: Arc Flash 101
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
Critical Power: Hospital Electrical Systems
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
Data Center Design
Data centers, data closets, edge and cloud computing, co-location facilities, and similar topics are among the fastest-changing in the industry.
click me