
AIA Says Nonresidential Construction Recovery Possible by Latter Part of 2011; Expects Sharp Declines for the Rest of 2010
July 15, 2010
Market Segment Consensus
Growth Forecasts
|
2010
|
2011
|
Overall nonresidential
|
-20.3%
|
3.1%
|
Commercial / industrial |
Hotels
|
-43.3%
|
8.7%
|
Office buildings
|
-29.1%
|
0.0%
|
Retail
|
-25.6%
|
7.6%
|
Industrial
|
-21.3
|
-2.0%
|
Institutional |
Amusement/recreation
|
-14.4%
|
8.1%
|
Education
|
-13.2%
|
1.3%
|
Religious
|
-10.2%
|
0.0%
|
Public safety
|
-9.1%
|
-0.7%
|
Health care facilities
|
-6.5%
|
5.1%
|
Even with modest improvements in the overall U.S. economy, nonresidential
construction spending is expected to decrease by more than 20 percent
in 2010 with a marginal increase of 3.1 percent in 2011 in inflation
adjusted terms, according to the American Institute of Architects
(AIA) semi-annual Consensus Construction Forecast, a survey of the
nations leading construction forecasters. Poor conditions
remain because of an oversupply of nonresidential facilities in
most construction categories, weak demand for space, continuing
declines in commercial property values, and a strong reluctance
to provide credit from real estate lenders.
There are a number of factors at play here that are contributing
to one of the steepest construction downturns in generations,
says AIA chief economist, Kermit Baker, PhD, Hon. AIA. We
have businesses nervous about expanding their facilities, a fragile
financial sector, excess commercial space and general unease in
the international economy. Things should begin to turn around midway
through next year with retail and hotels expected to see the strongest
growth, along with health care and amusement and recreation facilities.
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