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
Products and Materials | Feb 24, 2022
MAXXON® Corporation announces strategic affiliation with S3 Surface Solutions
Maxxon® Corporation, creator of Gyp-Crete® and a leader in the underlayment industry for 50 years, has aligned with S3 Surface Solutions, an innovative manufacturer of products that address problematic concrete slabs, to bring innovative, technology-driven subfloor preparation solutions to the flooring industry.
Products and Materials | Feb 14, 2022
How building owners and developers can get ahead of the next supply chain disaster
Global supply chain interruptions that started at the very beginning of the pandemic are still with us and compounding every step of the way. Below are a few proven tips on how to avert some of the costly fallout should we be faced with similar commercial disasters at any time in the future.
Walls and Partitions | Nov 29, 2021
ProWood FR Announces Availability of New Fire-Retardant, UL-Listed Wall Assembly
ProWood FR, a brand of UFP Retail Solutions, recently achieved UL Listing on a fire-retardant, pressure-treated wall assembly, ProWood FR UL V343 2-Hour Wall Assembly (UL 263 Listed).
Lighting | Oct 27, 2021
Legrand Wattstopper Strengthens Digital Lighting Management Products with ioXt Alliance Security Certification
Legrand, a global leader in electrical and network infrastructure solutions, is pleased to announce that the Wattstopper Digital Lighting Management (DLM) product family of networked lighting control systems is now certified through the ioXt Alliance Certification Program. As the most comprehensive cybersecurity certification available, the evaluation positions the Wattstopper DLM networked lighting control solution to meet DesignLights Consortium (DLC) Networked Lighting Control System Technical Requirements (Version 5), also known as NLC5.
| Oct 5, 2021
Weather barrier protects Brooklyn high-rise from the elements
The building team for the 20-story 22 Chapel Street project selects GP DensElement and DensDefy to ensure the building withstands the extremes of New York weather.
Products and Materials | Oct 5, 2021
Watts Offers “Backflow Testers of Tomorrow” Scholarships
The scholarship covers the cost of an approved Backflow Tester Certification training course and exam.
Products and Materials | Aug 16, 2021
Glen Dimplex Americas Appoints Kevin Rantin as Director of US Sales - Trade Flame Division
Glen Dimplex Americas (GD Americas) has appointed Kevin Rantin as Director of Sales and will lead the US Trade Flame Sales Team for the company’s fireplace brands including, Dimplex, Faber and Nectre. A world leader in electric fireplace technology under the Dimplex brand, Glen Dimplex Americas offers a range of industry-leading solutions for virtually every commercial sector and recently added the luxury Faber gas fireplace brand and the trusted Nectre wood-burning stove line to its expanding product portfolio.
Products and Materials | Apr 9, 2021
Working From Here: Delivering Acoustic Sanity in Multi-Family and Mixed Use Buildings in the Post-COVID Era
REGUPOL, manufacturer of a comprehensive range of noise abatement products, offers wall and ceiling isolation systems to provide a reliable solution to effectively reduce airborne noise between rooms.
Products and Materials | Apr 6, 2021
Nationwide Protective Coatings launches PERMAKOTE® Metal Roof Paint
This easy to apply roof coating system will provide many years of durable protection and will extend the roof’s life.
Coronavirus | Mar 11, 2021
The Weekly show, March 11, 2021: 5 building products for COVID-related conditions, and AI for MEP design
This week on The Weekly show, BD+C editors speak with AEC industry leaders about building products and systems that support COVID-related conditions, and an AI tool that automates the design of MEP systems.
