Renovation claims 50% share of firm billings for first time

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AIA, is the trend\u2019s link to the pandemic, which is more tenuous than you might think. \u201cAs far as our respondents are concerned,\u201d he says, \u201cthis rebalancing of new construction versus reconstruction is a much bigger trend.\u201d"],[0,[],0," "]]],[1,"p",[[0,[1],1,"What has the balance between new construction and reconstruction looked like over the last two decades?"],[0,[],0," Reconstruction is an underappreciated segment in design and construction, partially because it\u2019s difficult to track these projects. When you talk to construction industry analysts and you ask them how much of all the work is reconstruction, they\u2019ll generally estimate something like 20-25%, which everyone knows is undercounted because it\u2019s so hard to track. The AIA has been tracking this for 20 years now and, at that time they were in the mid-30% range, which is a good deal higher than what others are reporting and increasing over that period of time. To see numbers as high as they are now, we\u2019d probably have to go back a lot farther than when AIA started tracking reconstruction projects in 2002 to the Great Depression to see something on this magnitude."]]],[1,"p",[[0,[1],1,"What accounts of the discrepancy between what architects are reporting and what, say, general contractors are reporting when it comes to adapting, remodeling, or renovating existing buildings? "],[0,[],0," Architects are the only source I\u2019ve seen who have a real handle on what\u2019s going on in this area because general contractors aren\u2019t engaged in these projects. If you\u2019re doing a systems upgrade or a lighting upgrade, owners may just use a sub-contractor and bypass the general contractor. So, I think that\u2019s one of the major reasons why it\u2019s so underreported. "]]],[1,"p",[]],[1,"p",[[0,[1],1,"In the last decade, total private spending on both new construction and remodeling was $1.6 trillion, with spending increasing almost every year. What are architects saying about what\u2019s driving remodeling, renovation, and reconstruction? "],[0,[],0," We asked architecture firms about the most important goal of reconstruction projects firms have worked on in the last 12 months, and we found that it was a tie for the top two primary reasons: adaptive reuse at 25% and conversion and basic interior modernization at 25%\u2014making up a full half of all respondents. The next half of responses are a bunch of different answers. Tenant fit-outs were 18%, adding usable space was about 10%, upgrades to the shell or to the systems constituted another 10%, and historic preservation was 3%. "]]],[10,0],[1,"p",[[0,[1],1,"What about the net-zero and climate positive goals some firms have committed to? Where do they sit? "],[0,[],0," That\u2019s what intrigued me the most, I think, which is that energy performance was 3.8% and increased resiliency was 1.6%, meaning they were not very common primary goals among respondents when asked why they undertook reconstruction projects \u2013 which, again, we\u2019re using as an umbrella term to include renovation, retrofitting, and restoration. Over the next few months, as the price of oil per barrel fluctuates, we will see how those percentages go up or down. "]]],[1,"p",[[0,[1],1,"If renovating, retrofitting, and restoring are eclipsing new construction today, what suggests it might be an anomaly and what suggests it might not be?"],[0,[],0," I would lean heavily into \u201cnot\u201d an anomaly. This is a long-term trend, our economy is growing slowly\u2014a lot slower than it has in recent memory\u2014and I think that means we don\u2019t need new things so much as we need to reuse what we have. Until we reverse this trend, which I don\u2019t see happening, we are going to move toward an increased share in reconstruction and a decreased share in new construction. "]]],[10,1],[1,"p",[[0,[1],1,"What suggests it might not be an anomaly? "],[0,[],0," The contrary argument\u2014or why one might say this shift in the balance between new construction and reconstruction is an unusual blip for 2022\u2014is the sentiment that, \u201cIt\u2019s easier and faster to start over again than it is to fix up a building.\u201d Part of that has to do with the fact that underutilized space in one area doesn\u2019t help solve space needs in another. It would be unusual for an old general store in rural Maine to be moved to Atlanta, for instance, for a new strip mall in a burgeoning suburb. But, as I said, I don\u2019t think this trend is an anomaly, and I think we are, as a country and as design and construction industries, finding that the opportunities to adapt or renovate what we already have is at least as appealing as starting anew on a site. "]]],[1,"p",[[0,[1],1,"How much of this trend is attributable to pandemic thriftiness, so to speak? "],[0,[],0," There\u2019s been a fair amount of anecdotal stories that the pandemic has generated reconstruction work\u2014that we\u2019ve had to reconfigure offices and restaurants for improved air circulation and six-foot guidelines, for instance. But we asked respondents about their shares of billings related to work induced by the pandemic, and the average was about 10% of their total reconstruction work. So, as far as our respondents are concerned, this rebalancing of new construction versus reconstruction is a much bigger trend than the acute demands of the pandemic would suggest. "]]]]}