Following modest increases in construction spending for nonresidential buildings in 2019, economists from eight leading industry organizations forecast slight growth in 2020 and 2021—1.5% and 0.9%, according to AIA's latest Consensus Construction Forecast panel.
Public safety, education, healthcare, and office are the bright spots in a market that is entering growth-slowdown mode. However, no downturn is projected by the economists.
The public safety sector is expected to grow 7.2% in 2020, followed by education (3.9%), healthcare (3.4%), and office (3.0%). Four sectors—hotels, religious facilities, amusement/recreation, and retail—will take a step back in construction spending in 2020, according to the report.
More from the AIA Consensus Construction Forecast:
Construction spending last year was surprisingly weak, but current estimates suggest the industry had a modest increase in 2019. Retail construction activity was expected to underperform in 2019 but did not see the double-digit percentage declines that were expected. The AIA’s Consensus Construction forecast panel expects similar conditions this year and next.
“The broader economy is expected to continue to see slower growth this year, but the number of potential trouble spots seems to be diminishing,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “Revenue trends at architecture firms saw an uptick in the fourth quarter last year, which suggests construction spending will continue to see growth in the coming quarters.”
Related Stories
Market Data | Jun 9, 2020
ABC’s Construction Backlog Indicator inches higher in May; Contractor confidence continues to rebound
Nonresidential construction backlog is down 0.8 months compared to May 2019 and declined year over year in every industry.
Market Data | Jun 9, 2020
6 must reads for the AEC industry today: June 9, 2020
OSHA safety inspections fall 84% and the office isn't dead.
Market Data | Jun 8, 2020
Construction jobs rise by 464,000 jobs but remain 596,000 below recent peak
Gains in may reflect temporary support from paycheck protection program loans and easing of construction restrictions, but hobbled economy and tight state and local budgets risk future job losses.
Market Data | Jun 5, 2020
7 must reads for the AEC industry today: June 5, 2020
The world's first carbon-fiber reinforced concrete building and what will college be like in the fall?
Market Data | Jun 4, 2020
7 must reads for the AEC industry today: June 4, 2020
Construction unemployment declines in 326 of 358 metro areas and is the show over for AMC Theatres?
Market Data | Jun 3, 2020
Construction employment declines in 326 out of 358 metro areas in April
Association says new transportation proposal could help restore jobs.
Market Data | Jun 3, 2020
6 must reads for the AEC industry today: June 3, 2020
5 ways to improve cleanliness of public restrooms and office owners are in no hurry for tenants to return.
Market Data | Jun 2, 2020
Architects, health experts release strategies, tools for safely reopening buildings
AIA issues three new and enhanced tools for reducing risk of COVID-19 transmission in buildings.
Market Data | Jun 2, 2020
5 must reads for the AEC industry today: June 2, 2020
New Luxembourg office complex breaks ground and nonresidential construction spending falls.
Market Data | Jun 1, 2020
Nonresidential construction spending falls in April
Of the 16 subcategories, 13 were down on a monthly basis.
