AIA Sees Weak Nonresidential Construction

Washington, DC, Jan. 6, 2010--Nonresidential construction will fall by 13.4 percent in 2010, after an estimated 20 percent decline in 2009, before a mild rebound in 2011, according to a survey by the American Institute of Architects.

Construction of industrial space and hotels will drop more than 20 percent, while construction of office buildings will decline by 18.6 percent and retail space by 17.2 percent, according to AIA's semi-annual survey.

Hotel, office and retail construction will revive in 2011, while industrial construction will fall further next year, the AIA said.

Overall, construction will increase 1.8 percent next year, AIA projected.

It forecast smaller declines in 2010 for institutional categories like recreation and religious facilities, as well as schools and healthcare buildings, partly reflecting U.S. government stimulus spending.

Public safety buildings are the only category expected to increase this year, by 0.8 percent.

The survey shows a more pessimistic view of construction activity than was expected in July 2009, when the forecast called for a 12 percent decline this year.

The AIA's twice-yearly survey is based on forecasts by McGraw Hill Construction, Global Insight, Moody's economy.com, and others. Recovery of nonresidential construction activity typically lags a recovery in the wider economy, especially a jobs revival, which drives demand for office and retail space.

The AIA's monthly index of billings by architectural firms has indicated contraction since January 2008.

Print the Article