2010 has been a rough year for construction, with spending decreasing by over 20%. The American Institute of Architects (AIA) found that a troublesome combination of low demand, a surplus of facilities, and declining property values has stunted construction projects.
“There are a number of factors at play here that are contributing to one of the steepest construction downturns in generations,” says AIA Chief Economist, Kermit Baker, Hon. “We have businesses nervous about expanding their facilities, a fragile financial sector, excess commercial space, and general unease in the international economy.”
Declining by 43%, the hospitality industry has been hit the hardest, according to AIA’s semi-annual Consensus Construction Forecast. Spending has also slowed for retail properties (25%) and office buildings (29%). Education fell by 13% while healthcare only dropped to 6.5%.
Despite one of the sharpest declines in recent years, a marginal increase of 3.1% is expected in 2011 in inflation adjusted terms. According to Baker, “Things should begin to turn around midway through next year with retail and hotels expected to see the strongest growth, along with health care and amusement and recreation facilities.”
To view the full report, visit http://www.aia.org/press/AIAB085343