AIA: Despite signals of impending declines, continued growth in nonresidential construction is expected through 2020

Kermit Baker

WASHINGTON –Spending on nonresidential building construction is expected to increase almost four percent this year and more than two percent in 2020, according to a new consensus forecast from The American Institute of Architects (AIA).

Continued volatility has not impacted construction spending as the projections by the AIA Consensus Construction Forecast Panel—consisting of leading economic forecasters—are largely unchanged from where they stood at the beginning of the year. While some individual construction sectors are projected to see declines over the next 18 months, the consensus projects overall building construction activity will continue to expand.

“Outlook showing nonresidential construction activity continuing to expand reflects the underlying strength of the economy, even this late in the business cycle,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “However, there are several potential threats to continued healthy growth in the broader economy as well as in the construction industry that would point to slower economic growth in future quarters.”

Market Segment Consensus Growth Forecasts 2019             2020

  • Overall nonresidential building                           3.8%            2.4%
  • Commercial/industrial total                               2.5%              1.1%
  • Hotels                                                                     3.6%            0.5%
  • Office space                                                           6.9%            2.2%
  • Retail                                                                     -0.8%           0.3%
  • Industrial total                                                       6.4%           3.3%
  • Institutional total                                                  4.9%            3.7%
  • Public safety                                                          8.2%            5.9%
  • Healthcare facilities                                              2.7%            3.7%
  • Education                                                               6.1%            4.4%
  • Amusement / recreation                                     4.4%            1.0%
  • Religious                                                             -4.5%          -2.8%

Complete details on the latest Consensus Construction Forecast can be found on AIA’s website.