2022 was a busy year. With a year over year growth of 8%, the industry market growth in 2022 is slower than the overall US economy. Of all the revenue in the US, construction accounts for $2.7 trillion in 2022.
Construction projects reflect the focus of the economy. With an increased interest in life sciences, advancements in technology, and increased spending on infrastructure focused on multiple projects including transportation, energy efficiency, public transportation, and resilience related projects focusing on climate related concerns, the nature of the project is changing and so is the funding.
What is being built? Data centers, manufacturing plants, life sciences buildings, education, semiconductor fabrication, urban mass transit, intelligent transportation systems. Learn more here.
What’s declining in construction? Shopping Centers, movie theaters, amusement parks, textile mills, lodging.
Construction activity reflects where the economy is going. Bioscience, public transportation and infrastructure, are the industries showing increased construction and growth as are distributed power, semiconductor fabrication, and logistic centers. Food and beverage manufacturing plants are also increasing as Americans buy more processed food. More money is being directed to multifamily construction with a projection of $123 billion in 2022-2026.
The largest spending sectors are multifamily, power, educational and highway and steel.
The highest growth sectors include transportation, highway and steel, water supply and conservation and development.
Facts to support this change in economy
- Importance of data centers The number of connected devices has tripled in the past 5 years.
More people work remotely, There is a higher demand on the power grid.
- Semiconductors are required to operate most products. In 2020 alone more than 932 billion computer chips were manufactured.
- Life sciences: more people are on prescription medication 60% of adults use prescription drugs daily.
What Sources to Watch
AIA is the Architectural Institute of America. As a foundation for architects these professionals will see the first warning signs of increase or decrease spending in the AEC industries. In June 2022 they had a positive outlook.
“The pandemic, supply chain disruptions, growing inflation, labor shortages, and the potential passage of all or part of the Build Back Better legislation could have a dramatic impact on the construction sector this year,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “Challenges to the economy and the construction industry notwithstanding, the outlook for the nonresidential building market looks promising for this year and next.”
“Given the slowdown in new project work, many architecture firms will rely on their near record levels of backlogs to support revenue,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “Still, firm leaders remain largely optimistic about future business trends. Almost two-thirds of architecture firms project that 2023 will be either a good year or great year for their firm.”
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