Following a 19.7% surge in spending for commercial, institutional, and industrial buildings in 2023, leading construction industry economists expect spending growth to come back to earth in 2024, according to the July 2023 AIA Consensus Construction Forecast Panel.
The twice-yearly Consensus Construction report aggregates building construction spending forecasts from nine leading economists:
- Richard Branch, Dodge Construction Network
- Scott Hazelton, S&P Global
- Steven Shields, Moody's Analytics
- Brian Strawberry, FMI
- Alex Carrick, ConstructConnect
- Anirban Basu, Associated Builders and Contractors
- Charles Dougherty, Wells Fargo Securities
- Bernard Markstein, Markstein Advisors
- Mark Vitner, Piedmont Crescent Capital
All nine economists are in agreement on a 2024 spending-growth slowdown. Two economists are calling for a contraction in spending (Wells Fargo, -1.0%; Piedmont Crescent Capital, -4.7%). ABC's Anirban Basu is the most bullish on 2024, predicting a 7.7% increase in overall building spending.
"The first half of this year has seen gains in construction spending on nonresidential buildings approaching 20%. However, this scorching growth rate is expected to moderate a bit moving into the third and fourth quarters," wrote AIA Chief Economist Kermit Baker, Hon. AIA, in the report. "Even with the easing in supply chain issues and the improved pricing of many construction materials and products, elevated interest rates, more restrictive lending on the part of banks, nervousness over the direction of the economy, and construction labor constraints are expected to slow the pace of growth."
Bright spots for the remainder of 2023 and 2024 include:
- Healthcare, driven by the aging baby boom population
- Manufacturing/distribution, thanks to the post-Covid reshoring of production resulting from supply chain issues during the pandemic
- Hotels, with leisure travel returning to normal following the pandemic
- Education, as school districts and higher education institutions play catch-up on projects in the wake of Covid.
"There are emerging concerns that outsourcing the manufacturing of high-tech products leaves our economy and national defense more vulnerable," Baker wrote. "The $280 billion in funding provided by the 2022 federal CHIPS and Science Act is designed to advance domestic research and manufacturing of semiconductors in the United States. These funds will boost spending for these facilities for much of the coming decade."
View the full AIA Consensus Construction Forecast Panel report, including an interactive table with market forecasts from all nine economists.
Related Stories
Giants 400 | Aug 22, 2023
Top 115 Architecture Engineering Firms for 2023
Stantec, HDR, Page, HOK, and Arcadis North America top the rankings of the nation's largest architecture engineering (AE) firms for nonresidential building and multifamily housing work, as reported in Building Design+Construction's 2023 Giants 400 Report.
Giants 400 | Aug 22, 2023
2023 Giants 400 Report: Ranking the nation's largest architecture, engineering, and construction firms
A record 552 AEC firms submitted data for BD+C's 2023 Giants 400 Report. The final report includes 137 rankings across 25 building sectors and specialty categories.
Giants 400 | Aug 22, 2023
Top 175 Architecture Firms for 2023
Gensler, HKS, Perkins&Will, Corgan, and Perkins Eastman top the rankings of the nation's largest architecture firms for nonresidential building and multifamily housing work, as reported in Building Design+Construction's 2023 Giants 400 Report.
University Buildings | Aug 7, 2023
Eight-story Vancouver Community College building dedicated to clean energy, electric vehicle education
The Centre for Clean Energy and Automotive Innovation, to be designed by Stantec, will house classrooms, labs, a library and learning center, an Indigenous gathering space, administrative offices, and multiple collaborative learning spaces.
Market Data | Aug 1, 2023
Nonresidential construction spending increases slightly in June
National nonresidential construction spending increased 0.1% in June, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. Spending is up 18% over the past 12 months. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.07 trillion in June.
K-12 Schools | Jul 31, 2023
Austin’s new Rosedale School serves students with special needs aged 3 to 22
In Austin, the Rosedale School has opened for students with special needs aged 3 to 22. The new facility features sensory rooms, fully accessible playgrounds and gardens, community meeting spaces, and an on-site clinic. The school serves 100 learners with special needs from across Austin Independent School District (ISD).
Mass Timber | Jul 11, 2023
5 solutions to acoustic issues in mass timber buildings
For all its advantages, mass timber also has a less-heralded quality: its acoustic challenges. Exposed wood ceilings and floors have led to issues with excessive noise. Mass timber experts offer practical solutions to the top five acoustic issues in mass timber buildings.
School Construction | Jun 29, 2023
K-12 school construction: 5 ways strong community relations can lead to success
When constructing a K-12 school, building positive relationships with the community—including students, parents, school staff and residents—is critical to the success of the project. Here are five ways Skanska puts the community first when building K-12 schools in the Pacific Northwest.
University Buildings | Jun 26, 2023
Univ. of Calif. Riverside’s plant research facility enables year-round plant growth
The University of California, Riverside’s new plant research facility, a state-of-the-art greenhouse with best-in-class research and climate control technologies, recently held its grand opening. Construction of the two-story, 30,000 sf facility was completed in 2021. It then went through two years of preparation and testing.
University Buildings | Jun 26, 2023
Addition by subtraction: The value of open space on higher education campuses
Creating a meaningful academic and student life experience on university and college campuses does not always mean adding a new building. A new or resurrected campus quad, recreational fields, gardens, and other greenspaces can tie a campus together, writes Sean Rosebrugh, AIA, LEED AP, HMC Architects' Higher Education Practice Leader.