Another Decline in Nonresidential Construction Forecasted for 2010

Despite signs that the overall U.S. economy is beginning to improve, nonresidential construction spending is expected to decrease by 13.4 percent in 2010 with a marginal increase of 1.8 percent in 2011 in inflation-adjusted terms, according to the American Institute of Architects (AIA).

The semi-annual Consensus Construction Forecast, a survey by AIA of the nation’s leading construction forecasters, also projected that commercial and industrial projects will continue to see the most significant decrease in activity. Institutional building categories are projected to 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. “Hardest hit will be the commercial and industrial sectors with projected declines in the 20 percent 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.”

Other market segment consensus growth forecasts:

Overall nonresidential         2010: -13.4%    2011: 1.8%

Commercial/Industrial
    Industrial        2010: -24.3%    2011: -7.8%
    Hotels            2010: -23.5%    2011: 5.4%
    Office Buildings    2010: -18.6%    2011: 11.8%    
    Retail            2010: -17.2%    2011: 3.2%

Institutional
    Recreation        2010: -12.9%    2011: 4.4%
    Religious        2010: -5.8%    2011: 2.0%
    Education        2010: -5.6%    2011: 6.0%
    Health Care        2010: -0.3%    2011: 2.5%
    Public Safety        2010: 0.8%    2011: -0.1%

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