Nonresidential building spending to decline through 2021, but a reasonably healthy recovery is expected in 2022

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Kermit Baker

WASHINGTON– Slowing demand at architecture firms last year is expected to contribute to a projected 5.7 percent decline in construction spending for 2021, according to a new consensus forecast from The American Institute of Architects (AIA).

The AIA Consensus Construction Forecast Panel—comprised of leading economic forecasters—expects steep declines this year in construction spending on office buildings, hotels, and amusement and recreation centers. Health care and public safety are the only major sectors that are slated to produce gains in 2021.

Growth in nonresidential construction is expected for 2022, with three percent gains projected for the overall building market matched by both the commercial and institutional sectors.

“The December jobs report confirmed that the economy needs additional support in order to move to a sustainable economic expansion,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “As pandemic concerns begin to wane and economic activity begins to pick up later in 2021, there is likely to be considerable pent-up demand for nonresidential space, leading to anticipated growth in construction spending in 2022.”