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
Industry Research | Aug 29, 2019
Construction firms expect labor shortages to worsen over the next year
A new AGC-Autodesk survey finds more companies turning to technology to support their jobsites.
Market Data | Aug 21, 2019
Architecture Billings Index continues its streak of soft readings
Decline in new design contracts suggests volatility in design activity to persist.
Market Data | Aug 19, 2019
Multifamily market sustains positive cycle
Year-over-year growth tops 3% for 13th month. Will the economy stifle momentum?
Market Data | Aug 16, 2019
Students say unclean restrooms impact their perception of the school
The findings are part of Bradley Corporation’s Healthy Hand Washing Survey.
Market Data | Aug 12, 2019
Mid-year economic outlook for nonresidential construction: Expansion continues, but vulnerabilities pile up
Emerging weakness in business investment has been hinting at softening outlays.
Market Data | Aug 7, 2019
National office vacancy holds steady at 9.7% in slowing but disciplined market
Average asking rental rate posts 4.2% annual growth.
Market Data | Aug 1, 2019
Nonresidential construction spending slows in June, remains elevated
Among the 16 nonresidential construction spending categories tracked by the Census Bureau, seven experienced increases in monthly spending.
Market Data | Jul 31, 2019
For the second quarter of 2019, the U.S. hotel construction pipeline continued its year-over-year growth spurt
The growth spurt continued even as business investment declined for the first time since 2016.
Market Data | Jul 23, 2019
Despite signals of impending declines, continued growth in nonresidential construction is expected through 2020
AIA’s latest Consensus Construction Forecast predicts growth.
Market Data | Jul 20, 2019
Construction costs continued to rise in second quarter
Labor availability is a big factor in that inflation, according to Rider Levett Bucknall report.
