{"id":1004466046,"date":"2020-07-23T05:45:06","date_gmt":"2020-07-23T13:45:06","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004466046"},"modified":"2020-07-23T05:45:06","modified_gmt":"2020-07-23T13:45:06","slug":"nonresidential-construction-to-decline-aia-report-says","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/nonresidential-construction-to-decline-aia-report-says\/","title":{"rendered":"Nonresidential Construction to Decline, AIA Report Says"},"content":{"rendered":"
\"\"<\/a>

Image via Pixabay.com<\/em><\/p><\/div>\n

The decrease in commercial construction spending that began this past spring is likely to continue well into 2021, according to the midyear update to the American Institute of Architects\u2019 Consensus Construction Forecast.<\/p>\n

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READ ALSO<\/strong>: What Will Construction Look Like When COVID-19 Ends?<\/a><\/p>\n

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Among all nonresidential sectors, the commercial building sector\u2014consisting of office, retail and hotel properties\u2014is expected to be the hardest hit, with spending projected to decline almost 12 percent this year and a further 8 percent in 2021, according to the forecast.<\/p>\n

Moderate declines in some sectors<\/h2>\n

In somewhat of a contrast, the industrial sector\u2014comprising manufacturing and distribution facilities\u2014is forecast to experience more modest declines of 5 percent this year and 3 percent in 2021. Institutional buildings overall\u2014including health-care and education projects\u2014are expected to see the most moderate declines of almost 5 percent this year and another 2 percent next year.<\/p>\n

\"\"<\/a>

Kermit Baker, Chief Economist, American Institute of Architects. Image courtesy of American Institute of Architects<\/em><\/p><\/div>\n

The pandemic is, of course, the trigger for all this, and the forecast discusses numerous unknowns that could either shorten or lengthen the construction decline. These include the earlier-than-expected arrival of a vaccine, additional federal stimulus spending, and continuing difficulties in industries, such as restaurants and airlines, that could be forced to operate at greatly reduced capacities for extended periods.<\/p>\n

Retail<\/h2>\n

Sectors that were facing other problems before the advent of COVID-19 include retail, which has been hammered by online shopping for years now. \u201cSpending on retail facilities is expected to continue its 2019 weakness<\/em>,\u201d the AIA forecast says, declining 8 percent this year and 7 percent in 2021.<\/p>\n

Hospitality<\/h2>\n

Another sector that was already challenged is hospitality, which has been devastated by limited personal and business travel, and the near elimination of conventions and trade shows. \u201cWhile competition from Airbnb and other online sources was already limiting the need for new hotels, the pandemic has accelerated this weakness,<\/em>\u201d notes AIA.  Hotel construction is expected to be the weakest of any major nonresidential sector, with declines of more than 20 percent this year and another almost 17 percent next year.<\/p>\n

Office<\/h2>\n

But previously healthier sectors will also see construction spending fall. \u201cThe dramatic downturn in office employment will limit the need for new facilities<\/em>,\u201d predicts the AIA. \u201cAdditionally \u2026 many businesses have found telecommuting to be an attractive option, and many workers feel safer at home, particularly those relying on public transportation for their work commute<\/em>.\u201d Spending on office construction is expected to fall 11 percent this year and almost 8 percent in 2021.<\/p>\n

Health Care<\/h2>\n

Finally, the AIA expects health care to be one of the few sectors to dodge a recession this cycle. \u201cEven though elective health treatments have fallen off in recent months, demographics remain very positive for health-care spending moving forward. One wild card is the long-term trend toward telemedicine, and whether that will continue to be a popular alternative to in-person care<\/em>.\u201d The AIA sees health-care spending as increasing more than 2 percent this year and another 3 percent next.<\/p>\n

Read the full report<\/em><\/a> on AIA\u2019s website.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Spending on nonresidential building, having already fallen over the last few months, is projected to decline through at least part of 2021, according to a new forecast from the American Institute of Architects. <\/p>\n","protected":false},"author":882,"featured_media":1004466091,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21782,21808,45527,23891,21742],"tags":[],"class_list":["post-1004466046","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-development","category-featured","category-keyword-optimized","category-national","category-latest"],"acf":[],"yoast_head":"\nNonresidential Construction to Decline, AIA Report Says - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/nonresidential-construction-to-decline-aia-report-says\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Nonresidential Construction to Decline, AIA Report Says\" \/>\n<meta property=\"og:description\" content=\"Spending on nonresidential building, having already fallen over the last few months, is projected to decline through at least part of 2021, according to a new forecast from the American Institute of Architects.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/nonresidential-construction-to-decline-aia-report-says\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2020-07-23T13:45:06+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/07\/shipyard-2.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"620\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Scott Baltic\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/nonresidential-construction-to-decline-aia-report-says\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/nonresidential-construction-to-decline-aia-report-says\/\",\"name\":\"Nonresidential Construction to Decline, AIA Report Says - 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