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 | Aug 17, 2018
Product roundup: AIA show wrap-up
RopeWalker from Draper, YSD 600 T from YKK AP America, and Relay Robot from Kone are just three of the 16 products highlighted in BD+C's August Product Roundup.
Products and Materials | Jul 26, 2018
19 product innovations from the AIA 2018 convention
Vacuum-insulated glass, high-gloss fiber cement, attack-resistant openings were among the new product launches at the 2018 AIA National Convention last month in New York.
Products and Materials | Jul 16, 2018
Product innovations: Modular metal panels, hydraulic glass-clad doors, and motorized screens
These 6 products can provide innovative solutions to numerous design projects.
Flooring | Jun 21, 2018
Product roundup: Floor and wall tile collection
Project evolution from Ceramiche Caesar, Eminent Wood Maximum from Fiandre, and Voyage from Landmark are just three of the 12 products highlighted in BD+C's June Product Roundup.
Products and Materials | May 29, 2018
Product Roundup: 12 roof and wall systems
JM EPDM RT from Johns Manville, Flintlastic SA from CertainTeed, and RockWool Multifix from RockWool are just three of the 12 products highlighted in BD+C's May Product Roundup.
Windows and Doors | Apr 5, 2018
Product roundup: 12 windows + doors products
Schlage's M Collection, Hufcor's Invista, and Sierra Pacific Windows' FeelSafe Bi-fold door are just three of the 12 products highlighted in BD+C's April Product Roundup.
Products and Materials | Feb 19, 2018
Product roundup: 16 sound solutions
Flexi-panel from Extech, Classic Ultra from Icynene, and Heartfelt from Hunter Douglas are just three of the 16 products highlighted in BD+C's February Product Roundup.
Daylighting | Jan 17, 2018
Product roundup: 12 daylighting technologies
Phatom 5000 from Tubelite, SolaMaster 300 from Solatube, and Fallbrook XL Series from C.R. Laurence are just three of the 12 products highlighted in BD+C's January Product Roundup.
Products and Materials | Dec 20, 2017
Liquid air barrier goes on, rain or shine
The silyl-terminated polyether (STPE) liquid-applied air barrier does not wash off when exposed to light rain following application.
