Baker’s AIA Consensus Construction Forecast, published semi-annually, uses projections from economic monitoring groups to predict construction spending over a 12 to 18-month period. One of the sources tapped for the projection is Moodys’ Investors Service Inc. Moody’s noted that U.S. commercial real estate values sank to the lowest level in 7 years in October 2009. The AIA forecast also looked at individual project types – industrial facilities, for example, were predicted to slump the most in 2010 with a 24% decline that would continue in 2011 with an additional 8% drop. The overall increase in 2011, however slight, is predicted to be led by:
- office buildings——a drop of 19% in 2010, but a rebound of a 12% increase in 2011;
- hotels—a decline of about 24% in 2010, but a growth of over 5% in 2011; and
- retail construction—falling 17% this year before climbing about 3% next year.
The education and healthcare markets, which have kept some design firms in business during the recession, show mixed opportunities. Healthcare, which is predicted to decline only slightly in 2010, is seen as growing by only 2% next year while the education market—somewhat buoyed by the decline in construction costs—is forecasted to drop by almost 6% in 2010 before rebounding by about the same percentage in 2011.