As a result of the partially shutdown economy, businesses and organizations will continue to be hesitant to invest in modernized or new facilities, according to a mid-year update to the American Institute of Architects’ (AIA) Consensus Construction Forecast. The trend ends an almost decade-long expansion in construction spending.
The AIA Consensus Construction Forecast Panel—consisting of leading economic forecasters—projects spending on nonresidential facilities will decline just over eight percent this year, and another five percent in 2021. The commercial building sector is expected to be the hardest hit, with spending projected to decline almost 12% this year and another eight percent in 2021. The industrial sector is slated to see declines of five percent this year and three percent next year. While institutional buildings will fare the best on the nonresidential side, spending on these facilities is projected to drop almost five percent this year, and another two percent next.
“As much of the economy was shut down in mid-March to help limit the spread of the pandemic, there was hope that after the initial steep decline in economic activity there could be an almost equally quick recovery,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “However, since mid-June economic growth has stalled. The timing coincides with a spike in new Covid-19 cases across the country, and the resulting pause or roll-back of reopening plans in many states.”
Complete details on the latest Consensus Construction Forecast can be found on AIA’s website.
Related Stories
Market Data | May 19, 2020
5 must reads for the AEC industry today: May 19, 2020
Clemson's new mass timber building and empty hotels as an answer for the affordable housing shortage.
Market Data | May 18, 2020
5 must reads for the AEC industry today: May 18, 2020
California's grid can support all-electric buildings and you'll miss your office when it's gone.
Market Data | May 15, 2020
6 must reads for the AEC industry today: May 15, 2020
Nonresidential construction employment sees record loss and Twitter will keep all of its office space.
Market Data | May 15, 2020
Nonresidential construction employment sees record loss in April
The construction unemployment rate was 16.6% in April, up 11.9 percentage points from the same time last year.
Market Data | May 14, 2020
5 must reads for the AEC industry today: May 14, 2020
The good news about rent might not be so good and some hotel developers consider whether to abandon projects.
Market Data | May 13, 2020
House democrats' coronavirus measure provides some relief for contractors, but lacks other steps needed to help construction
Construction official says new highway funding, employee retention credits and pension relief will help, but lack of safe harbor measure, Eextension of unemployment bonus will undermine recovery.
Market Data | May 13, 2020
5 must reads for the AEC industry today: May 13, 2020
How to design resilient libraries in a post-covid world and vacation real-estate markets are 'toast.'
Market Data | May 12, 2020
ABC’s Construction Backlog Indicator falls in April; Contractor Confidence rebounds from historic lows
Nonresidential construction backlog is down 0.4 months compared to the March 2020 ABC survey and 1.7 months from April 2019.
Market Data | May 12, 2020
6 must reads for the AEC industry today: May 12, 2020
A 13-point plan to reduce coronavirus deaths in nursing homes and Bjarke Ingels discusses building on Mars.
Market Data | May 11, 2020
Interest in eSports is booming amid COVID-19
The industry has proved largely immune to the COVID-19 pandemic due to its prompt transition into online formats and sudden spike in interest from traditional sports organizations.
