The AEC industry is heading into 2010 in better shape than was the case a year ago, according to the 2010 AEC Industry Outlook: Strategy and Insight for Design & Construction Firms, a new forecast released by ZweigWhite this month.
A significant turnaround for the commercial market isn't anticipated until 2011, but a modest pickup is expected in late 2010. Some sectors are faring better than others—and will continue to do so. Markets to watch for 2010: healthcare, education, and mixed-use.
Following is an overview of the major commercial AEC markets, based on the ZweigWhite report.
Three sectors showing growth
Healthcare. This sector's growth over the past few years is expected to continue for 2010 and beyond. Although some slowing is expected, healthcare is still considered the hottest market for AEC firms. Behind the market's growth: rising numbers of outpatient procedures, aging population, declining hospital infrastructure, consolidation of healthcare systems, BIM and other technologies, sustainable design, and security and disaster preparedness.
The value of healthcare construction to be put in place for 2010 will reach $48.5 billion, an increase of 1.2% from 2009 levels.
Education. Education is one of the largest sectors for AEC firms, and it's growing, making K-12 and higher education markets two of the industry's best prospects. The markets aren't expected to slow significantly, but they took big hits in 2008 and 2009 and are not immune to the downturn.
For 2010, the education sector outlook is mixed, with high school construction looking strong and college and university construction to continue apace to meet projected enrollment increases through 2017. Project work is also expected to be mixed—some new construction and some expansions and renovations to existing facilities.
Overall, the value of all school construction to be put in place for 2010 will top $99.5 billion.
Mixed-use. Another bright spot in the industry. Mixed-use projects are gaining in popularity because the building type ties into New Urbanist principals, creates more livable communities, and is being used as a catalyst for city redevelopment.
Construction spending on mixed-use projects is not tracked, so predictions for 2010 are unavailable. Mixed-use projects, however, aren't immune to a slow economy because many incorporate components from markets that are down, such as lodging and retail.
The rest of the story
Lodging. One of the hardest-hit commercial sectors, lodging is expected to continue its sluggish pace in 2010. The decline, however, is viewed as cyclical, and a recovery is anticipated for 2011.
The value of lodging construction to be put in place for 2010 will reach $20.1 billion, a decrease of 12.8% from 2009 levels.
Manufacturing. Construction of manufacturing and industrial facilities also slowed significantly because of the recession, and 2010 is expected to be another down year. Rents are expected to decline through 2010. Market recovery isn't expected until 2011, and then is expected to be slow.
The value of manufacturing construction to be put in place for 2010 will reach $59.6 billion, a decrease of 19% from 2009 levels.
Multifamily. This sector was hit hard by the recession, and a slow 2010 is expected, with some growth anticipated in 2011. Multifamily starts are notoriously volatile, but they are expected to reach 126,000 for 2010, down from 130,000 in 2009. Looking ahead to 2011, multifamily starts are expected to average 150,000.
Office buildings. With so many layoffs, the nation's reduced workforce is the biggest drag on the office sector. An improving economy signals a turnaround—although the rebound will happen slowly and cautiously. Vacancy rates are expected to remain high during 2010 and then start to decrease in 2011.
The value of office construction to be put in place for 2010 will reach $46.6 billion, a decrease of 13.5% from 2009 levels.
The ZweigWhite 2010 AEC Industry Outlook (214-page PDF, $295; free Executive Summary) may be ordered at: http://www.zweigwhite.com/p-858-2010-aec-industry-outlook-strategy-and-insight-for-design-construction-firms.php?mtn=F3658E
Related Stories
| Aug 11, 2010
AASHE releases annual review of sustainability in higher education
The Association for the Advancement of Sustainability in Higher Education (AASHE) has announced the release of AASHE Digest 2008, which documents the continued rapid growth of campus sustainability in the U.S. and Canada. The 356-page report, available as a free download on the AASHE website, includes over 1,350 stories that appeared in the weekly AASHE Bulletin last year.
| Aug 11, 2010
AECOM, Arup, Gensler most active in commercial building design, according to BD+C's Giants 300 report
A ranking of the Top 100 Commercial Design Firms based on Building Design+Construction's 2009 Giants 300 survey. For more Giants 300 rankings, visit http://www.BDCnetwork.com/Giants
| Aug 11, 2010
'Flexible' building designed to physically respond to the environment
The ecoFLEX project, designed by a team from Shepley Bulfinch, has won a prestigious 2009 Unbuilt Architecture Design Award from the Boston Society of Architects. EcoFLEX features heat-sensitive assemblies composed of a series of bi-material strips. The assemblies’ form modulate with the temperature to create varying levels of shading and wind shielding, flexing when heated to block sunlight and contracting when cooled to allow breezes to pass through the screen.
| Aug 11, 2010
New book provides energy efficiency guidance for hotels
Recommendations on achieving 30% energy savings over minimum code requirements are contained in the newly published Advanced Energy Design Guide for Highway Lodging. The energy savings guidance for design of new hotels provides a first step toward achieving a net-zero-energy building.
| Aug 11, 2010
Pella Corporation ranks highest in customer satisfaction
Pella Corporation has earned the prestigious J.D. Power and Associates award for “Highest in Customer Satisfaction among Window and Patio Door Manufacturers” for the third year in a row.
| Aug 11, 2010
Perkins+Will master plans Vedanta University teaching hospital in India
Working together with the Anil Agarwal Foundation, Perkins+Will developed the master plan for the Medical Precinct of a new teaching hospital in a remote section of Puri, Orissa, India. The hospital is part of an ambitious plan to develop this rural area into a global center of education and healthcare that would be on par with Harvard, Stanford, and Oxford.
