Although the economy is showing signs of recovery, tough times are still ahead for the non-residential construction industry. According to the American Institute of Architects’ (AIA) Consensus Construction Forecast released on January 6th, spending in the sector is predicted to decline overall by 13.4 percent in 2010.
The industrial segment was forecasted to experience the greatest decline (down 24.3 percent), followed by hotels (down 23.5 percent), office buildings (18.6 percent), retail (17.2 percent), and amusement/recreation (down 12.9 percent). Lesser declines of under 6 percent are expected for the religious, education, healthcare facilities, and public service categories.
The report, however, does predict a turnaround to come by next year. Overall growth of 1.8 percent in 2011 is expected, with office buildings dominating the market with increases of 11.8 percent.
The lag in recovery is not a surprise to AIA chief economist, Kermit Baker, PhD, who has seen similar trends before. He says that since economic factors are typically slower to affect non-residential construction, it’s only logical that signs of improvement won’t appear until a healthy economy has been in place for 12 to 18 months. "I think the good news is that architects will see design activity pick up well before construction activity picks up," Baker says. "By mid-2010 we should start to see some forms of life on the design side—a shorter period of time that architects have to wade thru the downturn before they start seeing some improvements in business conditions."
—Nielsen Business Media
AIA Predicts Continued Decline for Nonresidential Construction
Improvement in the design sector is not expected until mid-2010.
AIA Predicts Continued Decline for Nonresidential Construction
Improvement in the design sector is not expected until mid-2010.
