Business Specialties  Development
Construction Activity to Fall Through 2010, Says AIA
Jul 17, 2009

Nonresidential construction spending is expected to decrease by 16 percent in 2009 and fall another almost 12 percent in 2010, according to the American Institute of Architects' latest Consensus Construction Forecast. Commercial projects will see the most significant decrease in activity.

The AIA's Consensus Construction Forecast Panel is conducted twice a year with the leading nonresidential construction forecasters in the United States, including McGraw Hill Construction, Global Insight, Moody's economy.com, Reed Business Information, the Portland Cement Association, and FMI. The purpose of the Consensus Construction Forecast Panel is to project business conditions in the construction industry over the coming 12 to 18 months. The Consensus Construction Forecast Panel has been conducted for 11 years.

"While there are some indications that the overall economy is beginning to recover, nonresidential construction activity typically lags behind the rest of the economy," says AIA chief economist, Kermit Baker, PhD, Hon. AIA. "Commercial facilities such as hotels, retail establishments, and offices will feel the decline most dramatically. The institutional market will fare much better as stimulus funding becomes available for education, healthcare, and government facilities."

Market Segment Consensus Growth Forecasts:

Commercial/Industrial
2009
2010

Retail
-28.0%
-12.6%

Hotels
-25.8%
-16.8%

Office buildings
-21.5%
-17.3%

Industrial facilities
-0.8%
-28.4%

Institutional

Amusement / recreation
-20.8%
-8.1%

Religious
-10.7%
-6.9%

Education
-8.2%
-0.7%

Health care facilities
-1.5%
-0.8%

Public safety
1.7%
-0.7%

"This nonresidential downturn is shaping up to be the deepest decline in nonresidential activity in over a generation," Baker adds. "However, we're beginning to see some moderation in the trends in design billings at architecture firms, so we hopefully are nearing the bottom of this cycle."

SOURCE: Contract Magazine



 
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