B_0111_ATM_Construction_spending

Construction Spending Experiencing Slow Recovery

Jan. 26, 2011

The AIA has released figures detailing a slow recovery for the nonresidential construction industry, predicting no increase in spending until late in 2011.  In fact, nonresidential construction spending is expected to take a 2% dip, with recovery and increases coming in 2012.


The AIA has released figures detailing a slow recovery for the nonresidential construction industry, predicting no increase in spending until late in 2011.  In fact, nonresidential construction spending is expected to take a 2% dip, with recovery and increases coming in 2012.

“The key factors that have prevented an accelerated recovery include historically low lending rates for real estate projects, the lingering effects of general overbuilding and an unfavorable bond market that has hampered the ability for municipalities to get the requisite funding to build new schools and hospitals,” says AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “Conditions should improve later this year and gain momentum as we move into 2012, particularly for hotel, retail and office building projects.”

Baker noted that two areas that may affect the design and construction industry are the federal budget deficit and increasing energy costs, as the price of crude oil continues to climb (it has doubled since 2009).  When it comes to construction spending, the industry may have to look to 2012 for recovery.

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