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Full Steam Ahead

Here in Chicago, the summer construction season is in full force, a sure-fire indication that the economy continues to improve and that the architecture and construction industry is on its way back.

While all indications are that the economy is continuing to improve, the American Institute of Architects' recently released semi-annual Consensus Construction Forecast downgraded its projections for the rest of this year to 4.9 percent growth in nonresidential buildings from a projected growth rate of 5.8 percent at the beginning of the year. Currently, the projections for next year remain unchanged at 8 percent growth.

Thanks to the harsh winter conditions most of the country faced, the year started off slowly for the general economy and construction sector. According to the AIA, while many sectors of the nonresidential commercial construction sectors were up over last year in recent months, the growth was offset by a decline in the institutional sector. Office and hotels were up as high as double-digits, while retail and other commercial facilities, such as manufacturing, grew at a more modest pace. However, in the institutional sector, health care and public safety declined more than 10 percent year-over-year, and education even saw a 1 percent decline in spending. With spending on religious facilities also declined, amusement and recreation was the only major institutional sector to see any improvement over last year.

According to the report, commercial buildings are expected to see healthy gains for the rest of this year and into next year, while the institutional market won't start to see a full recovery until sometime next year.

"The institutional market has been a drag on the overall recovery for the design and construction industry for the last few years, and until we see state and local governments ramp up spending for new education, health care and public safety structures there likely won't be a widespread acceleration in spending for the entire industry," says AIA Chief Economist Kermit Baker, Ph.D., Hon. AIA. "But we continue to have an optimistic outlook for the commercial and industrial sectors both for the rest of this year and into 2015."

On the residential side, national housing starts are expected to be between 1 and 2.2 million this year, representing a 10 to 15 percent increase over 2013 levels. While this is still well below the housing starts at the peak of the market in 2005 and those seen over the last five years of the 1990s, the expectations for residential activity remain positive through 2015. Having moved into my second new home community in the last eight years, I can vouch for the amount of homes going up around the neighborhood, which is always a good sign given the slowdown over the last several years.

In other news, the U.S. Department of Energy's Building Technologies Office announced up to $6 million in funding to deploy and demonstrate four emerging energy-saving technologies in commercial buildings across the country. These technologies-enVerid Systems, BuildingIQ Inc., QM Power Inc. and Northeast Energy Efficiency Partnerships-will generate data, case studies and information to help commercial building owners adopt new energy-efficient technologies, including advanced ventilation, building energy use optimization software, more efficient commercial refrigeration fan motors and advanced lighting controls. These projects are aimed at helping businesses cut energy costs through improved efficiency while reducing carbon pollution.

Each of these companies will be conducting its own projects, such as enVerid will be retrofitting 10 separate commercial building's ventilation systems over three years and BuildingIQ will be optimizing HVAC energy use through its Predictive Energy Optimization cloud-based software in 16 buildings. Meanwhile, QM Power will be installing approximately 12,000 of its high-efficiency fans in more than 50 grocery stores across the country, and Northeast Energy Efficiency Partnerships will be implementing two or more advanced lighting control technologies in 10 buildings.

It should be interesting to see how these projects turn out, and if more companies and building owners are inclined to implement them in their own projects after this.


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