AIA Northern Virginia
AIA Consensus Construction Forecast Shows Continued Growth through 2020
Posted Thursday, January 17

The AIA Consensus Construction Forecast, with updated forecasts for 2019 and 2020, has just been released. Though signs point to a slowdown, growth in construction spending should continue through 2020.

According to the report, compiled by AIA’s Chief Economist, Kermit Baker, Hon. AIA, spending on nonresidential buildings nationally is projected to grow by 4.4 percent this year, paced by healthy gains in the industrial and institutional building sectors. For 2020, growth is projected to slow to 2.4 percent, with essentially no increase in spending on commercial facilities but gains in the 3 percent range in the industrial and institutional categories. Still, there is growing concern inside and outside of the industry that a broader economic downturn may be materializing over the next 12 to 24 months.

Baker and the AIA Economics and Market Research Group, which provides AIA members with insights and analysis of the economic factors that shape the business of architecture, as well as the AIA Consensus Construction Forecast Panel, project continued healthy gains in construction activity in the near-term. Last year, spending on commercial facilities increased around 7 percent while advancing by about half that rate for institutional buildings and declining for the industrial sector. This year, gains in each of the major building sectors are expected to be in the 3 percent to 5 percent range.

These projections are consistent with business conditions at US architecture firms as measured by AIA’s Architecture Billings Index (ABI). The average ABI score for 2018 was essentially unchanged from 2017. Since the ABI has been shown to lead construction spending by an average of 9-12 months, this would suggest that the growth in spending on nonresidential buildings in 2019 should be close to the growth rate of 2018. Additionally, new design contracts coming into architecture firms grew at a healthy pace in 2018, underscoring the robust level of backlogs currently enjoyed by most firms.

Read the complete report, with additional information and details on other building sectors.

View the interactive Consensus Construction Forecast



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