Volume 43, Issue 10 - October 2008
As the nonresidential sector has experienced cutbacks in demand for new space, the projections for construction activity for new nonresidential facilities are for a mild decline in 2008, with a more significant downturn in 2009, according to the American Institute of Architects (AIA) semi-annual Consensus Construction Forecast. The forecasts are more negative for commercial and industrial buildings, with an especially large dropoff in the office and retail sectors. The continued increase in building material costs in recent years could also adversely affect the construction industry.
“The more pessimistic forecasts this round stems from the lack of growth in the overall economy, the ripple effect from the faltering housing market and the anxiety in the credit markets leading to a restriction in lending for all types of construction projects,” says AIA chief economist Kermit Baker, PhD, Hon. AIA. “The one bit of good news is that this contraction in activity is likely to be considerably milder than the construction recessions of the early 1990’s and earlier this decade.”
The forecast is based on a survey of the nation’s leading construction forecasters. ❙❙➤ www.aia.org