Construction spending is projected to grow through 2019, according to a new consensus forecast from The American Institute of Architects (AIA).
Spending on nonresidential buildings nationally increased only modestly last year, barely outpacing inflation in building costs. Halfway through the seventh year of continuous growth for the cyclical construction industry, 2018 might have looked to be the year that the industry would enter another recession. However, when polled at the beginning of this year, the AIA Consensus Construction Forecast Panel, which consists of leading economic forecasters, instead saw an acceleration in activity, projecting 4.0% growth in 2018 and a nearly equal 3.9% in 2019.
“At the halfway point of the year, this panel is even more optimistic,” said Kermit Baker, Hon. AIA, PhD, AIA Chief Economist. “Their forecasts have been marked up to 4.7% growth in spending for this year and an additional 4.0% in 2019. If these projections materialize, by the end of next year the industry will have seen nine years of consecutive growth, and total spending on nonresidential buildings will be 5% greater — ignoring inflationary adjustments — than the last market peak of 2008.”
The AIA Consensus Construction Forecast panel is comprised of Dodge Data & Analytics, Wells Fargo Securities, LLC, IHS Economics, Moody’s Economy.com, ConstructConnect, Associated Builders & Contractors, and FMI. The forecast has been conducted for 18 years.