The American Institute of Architects, Washington, missed an opportunity Monday to shine a bright light on the non-residential construction market. A press release from that august organization, describing its semi-annual Consensus Construction Forecast,was titled “Significant Downturn in Nonresidential Construction Activity Projected through 2010.” I read that headline and my first thought was “how can 2010 possibly be worse than 2009?”
Then I read in the first line of the release, “nonresidential construction spending is expected to decrease by 16 percent in 2009 and drop by another almost 12 percent in 2010 in inflation adjusted terms.” That made me scratch my head a bit because that seemed like progress to me. So I jumped to the numbers. They also said progress:
- Retail: -28% in 2009, -12.6% in 2010
- Hotels: -25.8% in 2009, -16.8% in 2010
- Office buildings: -21.5% in 2009, -17.3% in 2010
- Education: -8.2% in 2009, -0.7% in 2010
- Healthcare: -1.5% in 2009, -0.8% in 2010
Maybe it’s just my optimistic view, but these numbers are telling me that the falloff in construction activity is slowing significantly and healthcare (0.8%) and education (0.7%) are basically projected to break even. Many people would consider that to be a victory. I was surprised and very encouraged to see that the drop in retail construction will be less than half of the 2009 number. I didn’t think we’d see retail progress of any kind for a couple of years.
I doubt there is anyone who expects commercial construction to go from a significant slowdown to growth just because the calendar date changes. It’s going to take time for things to get back on the positive side, but this forecast tells me things are heading in the right direction. I also doubt that this forecast does a very good job of representing the extensive amount of remodeling/retrofitting work that is going on to make existing buildings more energy efficient/greener.
In my mind, this forecast is good news, not another black cloud of disaster, and the AIA blew its first chance in a long time to make a positive statement.—Gary L. Parr