WASHINGTON, D.C. — Even with modest improvements in the overall U.S. economy, nonresidential construction spending is expected to decrease by more than 20 percent in 2010 with a marginal increase of 3.1 percent in 2011 in inflation adjusted terms. Poor conditions remain because of an oversupply of nonresidential facilities in most construction categories, weak demand for space, continuing declines in commercial property values, and a strong reluctance to provide credit from real estate lenders. These are highlights from the American Institute of Architects (AIA) semi-annual Consensus Construction Forecast, a survey of the nation's leading construction forecasters. “There are a number … Read more

2.7 Percent Increase in Spending Represents Largest Monthly Increase in 10 Years Construction spending rebounded strongly in April, with an increase of 2.7 percent or $23 billion from March to a seasonally adjusted annual rate of $869 billion according to the latest analysis of federal spending figures released today by the Associated General Contractors of America. The association noted that the gains were primarily driven by private residential construction (up 4.4 percent) and public construction (up 2.4 percent), but that private nonresidential also increased significantly (up 1.7 percent). “The stimulus is clearly driving one of the biggest increases in construction … Read more

Business Conditions Slowly Improving Washington, D.C. — May 19, 2010 — For the third straight month the Architecture Billings Index (ABI) has gone up. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the April ABI rating was 48.4, up from a reading of 46.1 the previous month. Although this score reflects a continued decline in demand for design services (any score above 50 indicates an increase in billings), it is the highest score since January 2008 … Read more

The small March increase was due to a pickup in institutional spending, probably stimulus plan funded, offset by continuing declines in developer financed projects. The stimulus building construction will be more than offset this year by declining state and municipal budgets for schools and public buildings. Expect nonresidential construction spending to slip slightly lower into the fall. The largest risk of decline is for municipal spending, now being cut quickly after a plunge in property tax receipts. March construction spending increased for healthcare, religious buildings and public safety facilities. None of these gains are likely sustainable during midyear. Most of … Read more