Construction Economists Optimistic About 2014-15 Commercial, Industrial Growth

WASHINGTON, D.C. — Associated Builders and Contractors Chief Economist Anirban Basu, American Institute of Architects Chief Economist Kermit Baker and National Association of Home Builders Chief Economist David Crowe recently provided a collaborative economic forecast combining their expert economic analysis on leading, present and lagging economic indicators.

“A combination of low interest rates, wealth effects stemming from a booming stock market and rising home prices, surging energy production and expanding industrial output has helped position the U.S. economy for more rapid growth during the next several quarters,” said Anirban Basu. “This will lead to more robust recovery in the U.S. nonresidential construction industry, which has also been aided by stable materials prices and improving commercial real estate fundamentals. ABC predicts 7 percent nominal nonresidential construction growth in 2014, despite ongoing challenges in the public construction segment.”

“We continue to have an optimistic outlook for the commercial and industrial sectors for the rest of this year and into 2015,” said Kermit Baker, Ph.D., Hon. AIA. “However, until we see state and local governments ramp up spending for new education, healthcare and public safety structures there likely won"t be a widespread acceleration in spending for the entire industry.”

“Economic pickup in the second quarter was coupled with a return in housing construction,” said David Crowe. “We expect continued modest growth in housing construction as employment rises and more household formations take place. However, continued tight supplies of labor and land will put upward pressure on new home prices.”

In addition to the recent forecast, AIA released its latest Architecture Billings Index on July 23, NAHB released its latest NAHB/Wells Fargo Housing Market Index on July 16 and ABC's quarterly Construction Backlog Indicator was released on Aug. 19.

An archived version of the recent web conference is available here.