Nonresidential spending is expected to rise more than 7% in 2024, with an additional 2% increase next year, according to the American Institute of Architects’ midyear consensus construction forecast.
The report, by a group of construction forecasters, points to problems with construction loans, as well as declining commercial property values, among the reasons for the lower 2025 projection.
Activity between construction sectors continues to vary widely. Manufacturing construction is expected to see the highest increase this year, about 14%, with institutional construction up more than 10%. At the lower end, commercial construction is expected to show no change both this year and next.
“The disparity in sector performance highlights uneven economic conditions and ongoing market uncertainties,” AIA Chief Economist Kermit Baker said in a press release. “Despite the challenges, specific sectors such as manufacturing construction are showing continued strong activity due to an increase in projects started during the pandemic, while most institutional sectors are seeing reasonably healthy gains, driven by the education market.”
