Essentially all nonresidential (commercial, industrial and institutional) construction involves signage to one degree or another. So we looked at the different segments of nonresidential construction to see which were growing and which were slowing. The American Institute of Architects (AIA, Washington) publishes an annual consolidated forecast of nonresidential construction, aggregating the outlooks of seven major financial/analytical firms.
Kermit Baker, writing for the AIA, predicted that after a robust 2016 and more subdued 2017, the forecast for commercial construction for 2018 is for continued, though slower growth. “Commercial construction is expected to perform closest to prior expectations, with the 4 percent expected growth in spending for 2018 down less than 0.5 percentage points from the late-2016 forecast,” he wrote. “Industrial construction is now likely to see very modest 1.1 percent growth [in 2018], down from the prior expectations of 3.3 percent, while the institutional outlook [is] 4.1 percent with the current projections.”
Commercial construction includes office, retail and hotels, which are expected to grow in 2018 by 4, 4.6 and 2.4% respectively. Institutional construction comprises the following (including respective 2018 projected growth rates): healthcare (3.5), education (4.8), public safety (3.7) and amusement and recreation (3).
Baker sees three factors contributing to the growth rate’s easing. First is the general slowdown of the rate of growth of the US economy. “The consensus is that our economy will grow in the 2-2.5 percent range through the end of 2018,” he wrote. Second are construction industry concerns such as rising material costs and a tightening labor market relative to several years ago. And third, “the outlook for construction spending over the next several quarters relies heavily on the performance of four key sectors: retail, industrial, education, and healthcare.”