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 | Mar 22, 2018
Architecture billings continue to hold positive in 2018
Billings particularly strong at firms in the West and Midwest regions.
Market Data | Mar 21, 2018
Construction employment increases in 248 metro areas as new metal tariffs threaten future sector job gains
Riverside-San Bernardino-Ontario, Calif., and Merced, Calif., experience largest year-over-year gains; Baton Rouge, La., and Auburn-Opelika, Ala., have biggest annual declines in construction employment.
Market Data | Mar 19, 2018
ABC's Construction Backlog Indicator hits a new high: 2018 poised to be a very strong year for construction spending
CBI is up by 1.36 months, or 16.3%, on a year-over-year basis.
Market Data | Mar 15, 2018
ABC: Construction materials prices continue to expand briskly in February
Compared to February 2017, prices are up 5.2%.
Market Data | Mar 14, 2018
AGC: Tariff increases threaten to make many project unaffordable
Construction costs escalated in February, driven by price increases for a wide range of building materials, including steel and aluminum.
Market Data | Mar 12, 2018
Construction employers add 61,000 jobs in February and 254,000 over the year
Hourly earnings rise 3.3% as sector strives to draw in new workers.
Steel Buildings | Mar 9, 2018
New steel and aluminum tariffs will hurt construction firms by raising materials costs; potential trade war will dampen demand, says AGC of America
Independent studies suggest the construction industry could lose nearly 30,000 jobs as a result of administration's new tariffs as many firms will be forced to absorb increased costs.
Market Data | Mar 8, 2018
Prioritizing your marketing initiatives
It’s time to take a comprehensive look at your plans and figure out the best way to get from Point A to Point B.
Market Data | Mar 6, 2018
Persistent workforce shortages challenge commercial construction industry as U.S. building demands continue to grow
To increase jobsite efficiency and improve labor productivity, increasingly more builders are turning to alternative construction solutions.
Market Data | Mar 2, 2018
Nonresidential construction spending dips slightly in January
Private nonresidential construction fell 1.5% for the month, while public sector nonresidential spending increased 1.9%.