Commercial construction lull projected through 2010

As the U.S. economy continues to struggle, a recent forecast from the American Institute of Architects shows that nonresidential spending is expected to drop 16 percent this year and an additional 12 percent in 2010.

Those figures, which are adjusted for inflation, come from AIA's semiannual Consensus Construction Forecast, last released July 13.

The data shows that commercial projects will be hardest hit, but declines are expected to be more modest in institutional building categories.

"While there are some indications that the overall economy is beginning to recover, nonresidential construction activity typically lags behind the rest of the economy," said AIA Chief Economist, Kermit Baker in a news release. "Commercial facilities such as hotels, retail establishments and offices will feel the decline most dramatically. The institutional market will fare much better as stimulus funding becomes available for education, health care and government facilities."

Health care building, for example, is expected to drop 1.5 percent this year and 0.8 percent in 2010, but retail is anticipated to slide 28 percent and 12.6 percent respectively.

The AIA Consensus Construction Forecast Panel is conducted twice a year with nonresidential construction forecasters, including McGraw Hill Construction, Global Insight, Moody's economy.com and Reed Business Information. The forecast aims to project business conditions in the construction industry for the next 12 to 18 months.[[In-content Ad]]