The nonresidential construction industry is expected to see a 5-percent rise in spending this year, according to the American Institute of Architects (AIA) semi-annual Consensus Construction Forecast, and is expected to grow at a faster rate than the overall U.S. economy. AIA officials expect a high demand for hotels and retail projects to lead the commercial sector. Overall, a 7.2 percent increase in spending is predicted for the overall construction market for the year.

“After seeing construction activity seesaw for much of last year, there is a much stronger sense that we have entered a recovery phase and the industry is positioned to see continued economic improvement as we move through the year and into 2014,” says AIA chief economist Kermit Baker. “The resurgent housing market has led to a ripple effect where there is a need for more retail establishments and office buildings across the country.”

However, he notes that there is still some unpredictability ahead.

“We can’t truly think the design and construction industry is completely out of the woods until the continued uncertainty over federal budget and debt issues is resolved,” says Baker. “ This has caused enough anxiety in the real estate marketplace that has resulted in numerous delays and even cancelations of active construction projects. More than one quarter of architecture firms are reporting that this tenuous situation is a tremendous concern to clients and may lead to more delays or project terminations.”