ARTICLE
The AIA has come out with its 2024 Construction Forecast and after a strong performance in 2023, the outlook sees weaker conditions for this year and next. Key conclusions from AIA Consensus Construction Forecast panelists from across the country include: A more modest increase in spending on non-residential buildings in 2024, at a pace that will slow to just over 1% growth in 2025 Commercial facility spending will be flat for the next 24 months An increase of nearly 10% this year in manufacturing construction this year before stabilizing in 2025. Mid-single-digit gains for institutional construction in 2024 and '25 Even with greater federal funding for a variety of projects, building construction activity is projected to slow. There are a number of factors including tighter credit, higher construction input costs, declines in commercial property values, and structural changes in demand. In fact, AIA believes there are other indicators that confirm a construction slowdown is already underway. First, construction starts slowed or turned negative across all construction sectors at the end of 2023, and starts, in general, were lower than comparable periods the year prior. Per the Billings Index, architecture firms also saw weaker business conditions last year, and billings aren't likely to rebound anytime soon. Overall, the Panelists see the Institutional sector as having the most upside for the near future. Recently, there has been a balance of modest growth and declines, and this sector appears fairly immune from the issues confronting commercial and industrial facilities. The AIA Forecast report contains a broader explanation and interactive data. Click here to read more.