ASHRAE Journal - January 2013 - 6

industry news
Nonresidential U.S. Construction (Annual Percent Change)
SECTOR ACTUAL & FORECASTS

2009

2010

2011

2012

2013

2014

Lodging Office Commercial (retail) Health Care Education Religious Public Safety Amusement/Recreation Manufacturing Total

–28.8 –24.3 –37.3 –4.4 –1.6 –14.3 5.4 –11.1 6.8 –14.2

–54.4 –27.1 –27.0 –12.3 –14.3 –14.6 –19.1 –12.7 –29.0 –22.7

–23.7 –8.5 10.4 0.9 –4.6 –20.1 –8.2 –4.5 2.6 –2.5

25.0 4.4 8.0 3.1 1.7 –7.6 –1.6 0.1 16.9 5.9

12.3 7.4 5.7 4.8 2.2 –1.7 1.1 5.9 9.3 5.4

10.3 8.1 7.8 8.7 6.0 4.9 3.6 7.3 14.2 8.4

Source: History - Census Bureau, U.S. Department of Commerce; Forecast: Reed Construction Data

Keep Cork in the Champagne, But Construction on Rebound
ATLANTA—The nonresidential con- exceptions but we’re going to see more struction economy began showing signs boutique-type stores” that are focused on of life in 2012 and this should continue specific aspects in a market. in 2013, setting the stage for more robust With offices, the Internet is enabling growth in 2014. telecommuting and the average space per “It’s not time to uncork the champagne, employee is dropping. but it is probably okay to raise a beer,” “Telecommuting doesn’t work in every said Bernard Markstein, Ph.D., U.S. chief situation, but it’s a win-win when it does. economist for Reed Construction Data. The employee avoids commuting, and Much of the improvement in total con- the employer is able to hold down costs.” struction spending is being driven by singlefamily residential construction, which is OTHER SECTORS and their prosexpected to grow 22.4% in 2013 pects are: and 15.7% in 2014. Manufacturing was a success “Commercial (mainly retail) story in 2012, said Markstein, and offices tend to follow residenand should grow 9.3% in 2013 tial, lagging two to three years,” and 14.2% in 2014. The sector said Markstein. represented 16.1% of the nonresiFor example, the office sector dential building market in 2012 Markstein should grow 7.4% this year and and 17.6% in 2014. 8.1% in 2014. Commercial should grow “Despite all of the complaining, a lot 5.7% this year and 7.8% in 2014. These of companies are finding it necessary to two sectors collectively represent about expand because the economy is grow28% of the nonresidential building con- ing,” said Markstein. “This means more struction market. equipment is needed and that creates the need for more manufacturing and more BUT THE INTERNET has changed construction.” that. What will be built will be different He said lower natural gas prices also from what has been built. are stimulating activity and helping to “The advantage of walking into a store attract production facilities to the United is greatly reduced and big box stores States. are largely dying, especially those that Education is expected to continue sell electronics,” said Markstein. “The modest growth though 2013 then rise to Wal-Marts, Sam’s Clubs and Costcos are 6% in 2014. Education represents almost
6 ASHRAE Journal ashrae.org

28% of the nonresidential building construction market. The anti-tax mood and general unwillingness to spend has slowed public school construction and this will continue through 2013, said Markstein. “By 2014 the lack of spending on the public side will begin to hurt. As the economy gets better, parents will start complaining about crowded classrooms and aging schools,” said Markstein. Meanwhile, private schools are restarting plans suspended when the stock market plummeted a few years ago, hitting endowments and contributions. Since then endowments have rebounded and charitable contributions are up again. Health Care represents almost 14% of the nonresidential building construction market and is expected to grow 4.8% in 2013 and 8.7% in 2014. Markstein sees a reconfiguration in the health-care segment in which small groups of doctors or consortiums of doctors build offices and share labs and equipment such as magnetic resonance imaging (MRI) equipment. This is partly driven by lower costs for medical equipment. “A lot of hospitals also have started satellite locations,” he said. “This puts them closer to their suburban customers, particularly the elderly who are less mobile.” Lodging is expected to grow 12.3% in 2013 and 10.3% in 2014, after an excellent 2012. The sector represents about 4% of the nonresidential building construction market. “People have been denying themselves vacations and that’s starting to change. Business travel also is picking up,” he said. This is leading to more spending on lodging expansion, refurbishment and maintenance.” Amusement/Recreation and Religious are also smaller segments of the nonresidential building market at about 5% and 4%, respectively. The religious segment is not expected to grow until 2014. The amusement/recreation sector should grow 5.9% this year and 7.3% in 2014 as residential comes back and people start travelling again, said Markstein.
Source: Interview With Fred Turner

January 2013

ASHRAE Journal - January 2013

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