According to a report in the online newsletter “AIArchitect” the AIA (American Institute of Architects) Consensus Forecast Panel has indicated that 2005 and 2006 are shaping up to be banner years in construction. 2006 is expected to be the best year for non-residential construction since 1998.

Considering all categories of non-residential construction, an average increase of 3.7 percent is expected for this year, and 7.9 percent for next year.

Office construction is anticipated to grow 3.3 percent in 2005, but accelerate to an annual growth of 12.9 percent in 2006.

Retail and other commercial categories anticipate growth, but not as strong as offices. 3.4 percent is expected this year and 4.7 percent next year.

Hotel construction this year has been strong, 5.5 percent, and next year it is expected to be even stronger, a whopping 12.9 percent.

Construction of health facilities has dropped slightly so far this year, down six tenths of one percent, but is expected to bounce back to 6.2 percent in 2006.

Educational construction is at a moderate 2.2 percent for this year, but a 6 percent increase is anticipated for next year.

Construction in the religious category is down very slightly this year, about one-tenth of one percent. However, in 2006 it is expected to increase by 5.8 percent.

Public safety building construction is down the most of all categories, down by 2.1 percent. Only moderate growth is expected in this category next year, up by 2.9 percent.

Amusement and recreation building construction is not expected to change much from this year (3.8) to the next (3.9 percent).

The category that will experience the greatest amount of growth is, surprisingly, the industrial building category. An 18.4 percent increase is expected in both 2005 and 2006.

These are forecasts, of course, but they are based upon the number of contracts that architects currently hold for construction that will take place between now and the end of 2006.

Typically it takes from two to six months for an architect to produce a project, and from six months to eighteen months for the construction to be completed.

Statistics between McGraw Hill Construction (a company that tracks construction statistics) and the Commerce Department differ on how well 2005 has been thus far. McGraw Hill has construction down by 9 percent for the first five months of this year, but the Commerce Department has construction up by 3.5 percent.

The belief that the economy is very strong is because it is still expected to thrive despite higher prices for oil and building materials like steel, concrete, drywall and lumber, and despite rising interest rates.

Short term interest rates were 1 percent in 2004, but have gradually risen to 3.5 percent. By the end of 2005, these rates are expected to increase to 4 percent in an effort to prevent inflation.

Over one million jobs have been added so far this year, slightly more than those that were added during all of last year. This may explain the increase in non-residential construction, since the increased number of jobs has reduced the vacancy rates and increased the need for workspaces.

This is all good news for Americans and America’s churches. Funds for construction of new church facilities should grow along with the growth of the economy.

But there are still many challenges ahead, and churches should be prepared for the economy to go either direction.

The largest denominator in the cost of construction still remains to be China, who is still in a building boom that requires large quantities of the main commodities of construction - fuel, concrete, and steel. Had they succeeded in their recent attempt to purchase Unocal to access the oil in the Gulf of Mexico, China could have caused a major problem with the American economy.

A major terrorist attack could also affect the economy.

Even though construction prices continue to increase, it is obvious from the statistics that Americans still have a lot of confidence in America’s future.