Profits at big U.S. companies broke records last year, and so did pay for CEOs. The head of a typical public company made $9.NEW YORK – Private non-residential construction may pick up this year, as demand grows for new projects.
The Architecture Billings Index held at 52 in December, a sign of expansion, according to the American Institute of Architects. The commercial and industrial component – a proxy for private building activity – climbed to 54.1 in December, the highest in 10 months, the association said Jan. 18.
The monthly survey of American architectural firms is a leading indicator of non-residential construction, said Kermit Baker, chief economist for the association.
“Pretty solid readings in November and December suggest some modest improvement” may be afoot, he said.
The Federal Reserve echoed that outlook in its Jan. 11 Beige Book report, where it noted that demand for non-residential real estate has “improved in a number of districts.”
Spending on lodging, office, commercial and manufacturing buildings grew 8.2 percent in November to $9.2 billion from a year ago on a non-seasonally adjusted basis, data from the Census Bureau show. These types of commercial and industrial projects are historically the first part of the non-residential industry to improve during economic expansion, Baker said.
Other indicators – including vacancy rates – “are pointing toward a modest recovery,” said Rob McCarthy, an analyst in Chicago for Robert W. Baird & Co.
U.S. office vacancies fell in the fourth quarter to 17.3 percent, the lowest since 2009, from 17.4 percent in the prior period and 17.6 percent a year earlier, according to Reis Inc., a New York property-research company.
Inquiries for commercial building projects, another component of the Architecture Billings Index, also suggest “we are likely past trough,” as a multiyear recovery “could begin to gain some traction in 2012,” Ann Duignan, an analyst at JPMorgan Chase, wrote in a Jan. 18 report.
