By Ed Avis
As everyone knows, COVID massively impacted construction in 2020, and somewhat in 2021. Big storms and forest fires didn’t help. Depending on the community, many job sites were closed and new projects were put on hold. But things are changing – even if COVID is keeping its grip on many communities – and organizations that make predictions see an uptick in 2022.
The AIA Consensus Construction Forecast in July predicts an increase in nonresidential construction of 4.6 percent and an increase in industrial construction of 4.8 percent.
Of course, an uptick in construction doesn’t necessarily translate to an equivalent uptick in document reproduction. This is especially true given that COVID encouraged many municipalities to switch to digital bid submission. This post on the website of the Port Authority of New York/New Jersey was repeated in some form across the country: “Effective March 16, 2020, the Port Authority has temporarily transitioned to electronic or digital submissions. All bid or proposal submissions are required to be submitted via email, unless otherwise noted in the specific solicitation.”
And even though the Port Authority said this was a temporary move, everyone knows that a permanent switch to digital bidding is a given.
Nevertheless, construction growth still impacts reprographics. When builders are busy, they need more of what the reprographics industry offers, including renderings, job site signage, building signage, safety supplies, document management, 3D scanning, BIM assistance…and of course, in many cases still, paper documents.
From Very Optimistic to Moderately Pessimistic
The most optimistic source for 2022 predictions is Moody’s Analytics. This company, which provides financial intelligence and analysis to many industries, predicts growth of 18.8 percent overall in non-residential construction in 2022. This number is pushed by 132 percent growth in hotel construction, which is a little less amazing when you consider that hotel construction plummeted during COVID. Moody’s also sees strong growth in amusement/recreation construction (33.4 percent), retail (27.8 percent) and religious (8.6 percent).
Moody’s sees office construction, on the other hand, as dropping a bit, by 1.6 percent, following a 5 percent drop in 2021. Not surprising given the slow pace at which people are returning to downtown offices.
The other major predicting organizations are not nearly as bullish as Moody’s. Dodge Data & Analytics, which has a narrower scope than Moody’s, sees hotel construction climbing 15.6 percent in 2022, which would not even make up for the 40+ percent slump in that area in 2021. Dodge predicts office construction to climb by 11.7 percent, in direct contrast to Moody’s, but sees religious construction dropping nearly 5 percent.
Associated Builders and Contractors takes a moderate view. They predict a 2 percent increase in hotel construction, 3.7 percent in education construction, and 5.1 percent in health. ABC predicts a drop of 4 percent in religious construction.
On the far end of the spectrum, the most negative view comes from IHS Economics. This consulting firm, like Moody’s, covers a wide range of industries. IHS predicts that office construction will drop 2.6 percent; retail will drop 4 percent; and religious will drop 2.6 percent. The only solid gainers, in this firm’s view, will be hotel at plus 4.5 percent and health at plus 3.9 percent.
In case you’re wondering, no, the gaps between these predictions are not normally this wide. For the predictions compiled by the AIA for their July report, the widest gap is in the hotel category, which spans from Moody’s plus 132 percent to FMI’s negative 7.8 percent, a spread of nearly 140 points. While there often are gaps in the double digits, a quick review of the AIA reports from the last decade show nothing like 140 points. The closest was a spread of 27 points on religious construction between IHS and Moody’s in 2016. In the December 2018 AIA Consensus Construction Forecast, no spread between predictions even reached double digits!
Granted, 2018 was a much more predictable time for construction…and that probably explains the variety of predictions in the current report. It’s just darn hard to see what’s coming given COVID, massive storms, forest fires, and countless other unpredictable factors.
Nevertheless, reprographics firms should take comfort in the fact that most predictors anticipate a solid, albeit modest, increase in construction in 2022. That will help keep the light bill paid.
To see the July 2021 AIA Consensus Forecast and make your own analysis, click here: http://info.aia.org/aiarchitect/2021/charts/Jul%202021/ccf_071621.html