Further Decline in Nonresidential Construction Activity Expected in 2010

Jan. 7, 2010
According to the American Institute of Architects’ (AIA) semi-annual Consensus Construction Forecast, nonresidential construction spending is expected to decrease by 13.4% percent in 2010

According to the American Institute of Architects’ (AIA) semi-annual Consensus Construction Forecast, nonresidential construction spending is expected to decrease by 13.4% percent in 2010 with a slight increase of 1.8% in 2011 in inflation-adjusted terms. Commercial and industrial projects will continue to experience the most significant decrease in activity. Institutional building categories will fare better over this period thanks, in part, to federal stimulus spending.

“When economies emerge from this prolonged recession, recovery for nonresidential construction activity typically takes longer,” says AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “Hardest hit will be the commercial and industrial sectors with projected declines in the 20% range for 2010 in most building categories. Led by the health care market, the institutional sector will see far less dramatic declines and should help lead the construction industry into recovery in 2011.”

Market Segment Consensus Growth Forecasts



2010



2011



Overall nonresidential

-13.4%

1.8%



Commercial / industrial

Industrial

-24.3%

-7.8%

Hotels

-23.5%

5.4%

Office buildings

-18.6%

11.8%

Retail

-17.2%

3.2%



Institutional

Amusement / recreation

-12.9%

4.4%

Religious

-5.8%

2.0%

Education

-5.6%

6.0%

Health care facilities

-0.3%

2.5%

Public safety

0.8%

-0.1%

Source: The American Institute of Architects

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