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GIO Looks at Non-Residential Construction Starts – 2016 Overview, 2017 Predictions

past-present-and-future-signpostAs a company focused on the business of commercial design, not only do we track style trends and material preferences, but we also stay closely attuned to nonresidential and commercial construction starts and forecasts. As more commercial spaces are being built or renovated, that means more tile will be needed to cover surfaces in those spaces–and that’s important information for us to know in order to prepare to supply and service your needs responsively.

Here’s a glance at how the year is tracking on the construction side.

Construction spending greatly exceeded expectations in the nonresidential market in 2015, and 2016 has seen healthy growth levels as well. There continues to be significant demand for hotels, office space, manufacturing facilities and amusement and recreation spaces.

2016 nonresidential construction got off to a hot start and continued its momentum through the spring as commercial construction starts climbed 18% from February to March Construction Market Data reports. This is a significant spike even when compared to the typical March to April jump of 12%.

While overall construction starts fell 7% in June and 2% in July ( the declines were tied to two segments, public works and electric utilities), nonresidential building grew 7% in June followed by a 4% gain in June. Commercial building advanced 3%, with much of the increase coming from a 20% jump in office construction. The institutional sector of the nonresidential building market eased back 1% in July. Reduced activity was reported for educational facilities, down 5%, and healthcare facilities also showed reduced activity in July, decreasing by 4%. The smaller institutional categories saw gains in July, with public buildings up 5%, churches up 8%, amusement and recreational facilities up 11%, and transportation terminals up 11%.

2017 Predictions for Nonresidential Construction Starts

According to the American Institute of Architect’s (AIA) semi-annual Construction Consensus Forecast, construction spending in the non-residential market is predicted to increase by 8.3 percent in 2016 and by 6.7 percent in 2017. Demand is expected to be especially high for project types that include hotels, office space, industrial facilities, and amusement and recreation spaces.

The AIA’s forecast also included a list of the most prevalent design trends expected over the next ten years. The most prevalent trends are predicted to be associated with energy efficiency and related technology to integrate water conservation, solar and wind power generation, natural day lighting techniques and technology, automated controls and motion sensor activated lighting, as well as the use of innovative new building materials such as composites and new glass/glazing technologies.

The Associated Builders & Contractors, American Institute of Architects and National Association of Home Builders‘ chief economists recently gathered in Washington, D.C., for a mid-year market forecast, outlining stable to strong residential and commercial project activity through 2017.

While all of the economists predicted growth in 2017, they had varying degrees of optimism concerning the various construction sectors, but it was predicted that nonresidential construction spending growth will continue into the next year with an estimated increase in the range of 3 to 4%.








We consistently seek market data to best prepare and respond to the specific needs of the commercial architectural and interior design communities. Feel free to connect with your GIO sales representative for insights and ideas for taking your upcoming commercial building or renovation projects to the next level with superior tile selections.