More post-Katrina (non-residential) construction forecasts | Facility Executive - Creating Intelligent Buildings

The American Institute of Architects (AIA) has released a report on the impact of Katrina on the construction markets and the economy in the gulf region. Taking into consideration the larger context of the overall regional economy, the report examines the timeline for rebuilding efforts, the economic and construction indicators for Louisiana, Mississippi, and Alabama, […]


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The American Institute of Architects (AIA) has released a report on the impact of Katrina on the construction markets and the economy in the gulf region. Taking into consideration the larger context of the overall regional economy, the report examines the timeline for rebuilding efforts, the economic and construction indicators for Louisiana, Mississippi, and Alabama, […]
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More post-Katrina (non-residential) construction forecasts

More post-Katrina (non-residential) construction forecasts | Facility Executive - Creating Intelligent Buildings

The American Institute of Architects (AIA) has released a report on the impact of Katrina on the construction markets and the economy in the gulf region. Taking into consideration the larger context of the overall regional economy, the report examines the timeline for rebuilding efforts, the economic and construction indicators for Louisiana, Mississippi, and Alabama, and the outlook for building materials and construction labor demand.

The study, titled, The Economic and Construction Outlook in the Gulf States after Hurricane Katrina, sets out to provide design and construction professionals a forecast of key economic components related to the rebuilding process of the affected regions. Generally, the report predicts it will take up to five years to rebuild the areas hardest hit by the disaster. However, the research also forecasts short-term increases in building material costs, but an adequate labor supply.

“In the coming months, we expect to see a jump in prices for building materials such as concrete and gypsum products. Due to the destruction of some regional timberlands by Hurricane Katrina, there will also likely be a rise in lumber and plywood prices,” says AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “What is interesting from a labor perspective is that the increased demand for skilled trades in the gulf region is coinciding with an expected national slowdown in residential construction. That translates to a strong potential for a relocation of labor to the hurricane impacted regions.”

Key findings:
•Labor shift may allow for skilled trade workers to commit to projects in the affected regions.
•Rising prices for petroleum-based construction products (roofing products, PVC piping, and asphalt paving) will compound the effects of dramatic increases in transportation costs.
•Less than half of the lost housing stock in Louisiana is expected to be rebuilt due to decreased population base.
•Short-term spike in construction materials costs is not likely translate into long-term increases.
About The American Institute of Architects

On October 19, the AIA will also release the Architectural Billings Index (ABI) numbers for the month of September. The ABI is a monthly index compiled through a survey of current business conditions at AIA member firms. The findings amount to a strong predictive economic indicator that can provide a 6-8 month glimpse into the future of non-residential construction activity.

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