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AIA Sees Drops in Commercial Construction in 2009 and 2010

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The American Institute of Architects looked at forecasts from five sources to arrive at a consensus forecast for nonresidential construction in 2009 and 2010. The chart is interactive so you can see each of the five forecasts individually as well as the blended consensus.

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The downturn in the economy will translate into a steep drop for the nonresidential construction industry over the coming years. Construction activity will see an 11 percent decline in 2009, followed by an additional 5 percent drop in 2010. All the major commercial sectors will be hard-hit by this downturn, with declines expected to total between 25 percent and 35 percent for offices, retail facilities, and hotels over 2009 and 2010. Industrial activity—manufacturing and related distribution facilities—is slated to slow almost as much, with a 20 percent decline over this period. Institutional facilities should fare better, with two-year declines projected to run about 7 percent, and less than 5 percent for health-care facilities.

These forecasts were compiled recently from the AIA Consensus Nonresidential Construction Forecast Panel, comprising the leading national nonresidential construction forecasters. As the U.S. economy has deteriorated in recent months, their projections for construction activity have been revised down sharply. Economic stimulus proposals to revive our economy have concentrated on infrastructure investment and other facility modernization programs. However, until the broader economy recovers, the nonresidential construction industry is unlikely to see any reversal in activity levels.

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Elaine Misonzhnik

Senior associate editor Elaine Misonzhnik has been writing for National Real Estate Investor since June 2006 and has covered commercial real estate for more than 12 years. She first became...
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