Following modest increases in construction spending for nonresidential buildings in 2019, economists from eight leading industry organizations forecast slight growth in 2020 and 2021—1.5% and 0.9%, according to AIA's latest Consensus Construction Forecast panel.
Public safety, education, healthcare, and office are the bright spots in a market that is entering growth-slowdown mode. However, no downturn is projected by the economists.
The public safety sector is expected to grow 7.2% in 2020, followed by education (3.9%), healthcare (3.4%), and office (3.0%). Four sectors—hotels, religious facilities, amusement/recreation, and retail—will take a step back in construction spending in 2020, according to the report.
More from the AIA Consensus Construction Forecast:
Construction spending last year was surprisingly weak, but current estimates suggest the industry had a modest increase in 2019. Retail construction activity was expected to underperform in 2019 but did not see the double-digit percentage declines that were expected. The AIA’s Consensus Construction forecast panel expects similar conditions this year and next.
“The broader economy is expected to continue to see slower growth this year, but the number of potential trouble spots seems to be diminishing,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “Revenue trends at architecture firms saw an uptick in the fourth quarter last year, which suggests construction spending will continue to see growth in the coming quarters.”