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Architecture | Business

Nonresidential Construction Spending Expected to Moderate Through 2024

by GroundBreak Carolinas Staff on

While spending on nonresidential construction picked up momentum toward the end of 2022, construction spending will moderate in 2023 and slow significantly in 2024, according to a new report from the American Institute of Architects (AIA).

Despite macroeconomic headwinds such as inflation, rising interest rates, and weak consumer sentiment scores, the AIA’s Consensus Construction Forecast panel—comprising leading economic forecasters—is projecting nonresidential construction spending to grow 5.8 percent in 2023 but slow to under 1 percent in 2024. Similar to 2022, growth in construction spending in 2023 will be uneven with a projected 2.6 percent increase in the commercial sector, 15.1 percent for industrial facilities, and 4.1 percent for institutional buildings. In 2024 spending on commercial buildings is forecast to decline 1.4 percent, while industrial projects gain a modest 0.4 percent, and a 3.8 percent increase for institutional facilities.

“The U.S. economy will continue to face serious challenges as we move through 2023, dampening the construction outlook,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “However healthy architect and contractor project backlogs should ease the negative impact of an economic slowdown.”

Complete details on the latest Consensus Construction Forecast can be found on AIA’s website.

About AIA

Founded in 1857, AIA consistently works to create more valuable, healthy, secure, and sustainable buildings, neighborhoods, and communities. Through more than 200 international, state and local chapters, AIA advocates for public policies that promote economic vitality and public wellbeing.

AIA provides members with tools and resources to assist them in their careers and business as well as engaging civic and government leaders and the public to find solutions to pressing issues facing our communities, institutions, nation, and world. Members adhere to a code of ethics and conduct to ensure the highest professional standards.