Market Snapshot: Construction Spending Forecasts

Market Snapshot: Construction Spending Forecasts

The American Institute of Architects (AIA) released the midyear update of its Consensus Construction Forecast, a computed average of data from leading construction forecasters. 

Overall, construction spending is expected to continue to grow, but at a slower pace this year, before stabilizing in 2025. However, within the commercial category, hotel construction is forecasted to accelerate next year after being slightly negative this year.

Manufacturing and data centers have nearly doubled their share of nonresidential construction since 2019. The warehouse category, which is classified under “retail & other commercial,” now represents 9% of total nonresidential construction, up from 6% back in 2019.

The AIA points to the current lending market, weakness in commercial property values, and declining architecture billings as the main challenges with which the industry is grappling. Nonetheless, healthy growth is expected in institutional sectors such as health care and education.

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