Construction industry builds progress

By Business Observer Staff
| 7:49 a.m. September 13, 2013

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The national commercial construction market is poised for a comeback next year, courtesy of the industry's savior: apartment complexes.

Fitch Ratings, for one, projects private, non-residential home construction will grow 5% in 2014 if the weather cooperates, according to a new report from the CoStar Group, a commercial real estate data firm. The ratings agency predicts the industry will grow only 2% in 2013, partly due to wet weather earlier this year. A bulk of the new projects will be multifamily and apartments.

Another potential impediment to growth in commercial construction, beyond weather, is financing. While credit markets have loosened somewhat, lenders remain picky, Fitch says.

Still, the CoStar report is a cautious optimist's handbook for commercial construction. Other examples include:

The Architecture Billings Index, compiled monthly by the American Institute of Architects, was 52.7 in July, up more than a point from 51.6 in June. The institute's new projects inquiry index, moreover, rose 6.6%, from 62.6 in June to 66.7 in July. Any score over 50, says CoStar, is an increase in billings;

Nearly two-thirds of metro areas nationwide, 201 out of 339, posted year-over-year gains in construction employment from July 2012 to this past July, according to Associated General Contractors of America data.