Focus

What will the new year bring? According to various groups that track the construction industry, 2007 will be a pretty good year.

The American Institute of Architects (AIA) is expecting 6.2 percent growth in nonresidential construction. According to the AIA Consensus Construction Forecast Panel, the growth—if realized—would be the best performance for nonresidential construction during a two-year period since 1997-98.

And other organizations seem to agree though not all anticipate 2007 posting gains as significant as the panel suggests. For example, McGraw-Hill Construction, New York, and FMI, Raleigh, N.C., which are part of the AIA panel, are more conservative in their individual projections; McGraw-Hill Construction is predicting a 4 percent growth in nonresidential construction in 2007, and FMI is expecting growth of 5.7 percent, according to AIArchitect magazine.

The AIA Consensus Construction Forecast Panel says it expects gains of 5 percent for commercial facilities and more than 7.5 percent for industrial facilities during 2007. In addition, the panel expects a 4 percent increase in retail construction, 6.5 percent increase in hotel construction, 7.4 percent increase in educational facility construction and 5 percent increase in health-care facility construction.

The AIA panel's projections take into account increasing construction material costs, which, according to AIA, increased an average of 7.8 percent during 2006. This increase is slightly more than what was experienced during 2005 (6.1 percent) but less than 2004 (10.1 percent).

Growth is expected in the residential arena, as well. The National Association of Home Builders' (NAHB's) Chief Economist David Seiders says the association expects the overall housing economy to strengthen during 2007.

In his "Eye on the Economy" report, Seiders writes: "NAHB's forecast anticipates modest further declines in sales of new and existing homes during the fourth quarter of this year, but we expect to bottom out in the first quarter of 2007 before embarking on an extended recovery process."

Ambika Puniani Bailey is editor of Professional Roofing magazine and NRCA's director of communications.