The American Institute of Architects (AIA) semi-annual Consensus Construction Forecast, a survey of the nation’s leading construction forecasters, projects a 6.4% increase of spending in 2012. However because of a multitude of factors preventing a recovery for the beleaguered design and construction industry, the AIA study projects a decline of 5.6% in spending this year for nonresidential construction projects.
“Consumer and business confidence is poor and the overall economy has yet to pull out of the downturn that began in 2008, which both add to the general sense of anxiety and uncertainty in the real estate market” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “Spending on renovations of existing buildings has remained strong, but the depressed demand for new construction isn’t likely to improve until next year, led by the commercial sector: offices, retail and hotels.”
Baker added, “Steel, copper and aluminum have all increased ten percent or more in the past year, offsetting declines for lumber and concrete products. Rising energy costs have also been central to the unusual volatility in building material prices.”