The AIA Consensus Construction Forecast predicts that spending for nonresidential and commercial construction will continue to decline before a modest recovery in 2012. The reason for the continued decline, of course, is due to the overall uneven economic recovery. The hesistency on the part of lenders to finance construction projects, the weak financial position of governments at all levels, and rising costs of key building material commodities all restrain the nonresidential and commercial construction sectors.
Overall, many sectors of the building industry are seeing a decline this year followed by a slight rebound. The nonresidential sector is projected to decline 5.6 percent this year and recover at 6.4 percent in 2012. The commercial sector will see a 6.5 percent decline this year and rebound approximately 12 percent next year. Manufacturing facilities will see a steep decline at almost 16 percent, with a rebound of 8 percent. While the stable institutional sector will see the least amount of decline at 3 percent and rebound at 4 percent.
With such a week recovery, most businesses and institutions are refraining from building new facilities. However, spending on renovations of existing facilities has remained strong. Unstable home prices, unusually severe weather conditions, rising energy costs, concern over growing debt, and the rising national unemployment rate (up from 8.8 percent in March to 9.2 percent in June) have made consumers extremely nervous. This also threatens international markets that have seen rapid growth in recent years.
For a more thorough breakdown of the AIA Consensus Construction Forecast refer to this chart by following this link: http://info.aia.org/aiarchitect/2011/charts/consensus-survey/july/july.html