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.

Consulting-Specifying Engineer's Product of the Year (POY) contest is the premier award for new products in the HVAC, fire, electrical, and...
Consulting-Specifying Engineer magazine is dedicated to encouraging and recognizing the most talented young individuals...
The MEP Giants program lists the top mechanical, electrical, plumbing, and fire protection engineering firms in the United States.
How to use IPD; 2017 Commissioning Giants; CFDs and harmonic mitigation; Eight steps to determine plumbing system requirements
2017 MEP Giants; Mergers and acquisitions report; ASHRAE 62.1; LEED v4 updates and tips; Understanding overcurrent protection
Integrating electrical and HVAC for energy efficiency; Mixed-use buildings; ASHRAE 90.4; Wireless fire alarms assessment and challenges
Power system design for high-performance buildings; mitigating arc flash hazards
Transformers; Electrical system design; Selecting and sizing transformers; Grounded and ungrounded system design, Paralleling generator systems
Commissioning electrical systems; Designing emergency and standby generator systems; VFDs in high-performance buildings
As brand protection manager for Eaton’s Electrical Sector, Tom Grace oversees counterfeit awareness...
Amara Rozgus is chief editor and content manager of Consulting-Specifier Engineer magazine.
IEEE power industry experts bring their combined experience in the electrical power industry...
Michael Heinsdorf, P.E., LEED AP, CDT is an Engineering Specification Writer at ARCOM MasterSpec.
Automation Engineer; Wood Group
System Integrator; Cross Integrated Systems Group
Fire & Life Safety Engineer; Technip USA Inc.
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
click me