AIA sees slower construction spending in ’25

Spending on nonresidential buildings will increase more than 7% this year, but market challenges will limit growth to 2% in 2025, according to the American Institute of Architects’ newly released midyear Consensus Construction Forecast.

The “challenging lending market for construction projects, continued weakness in commercial property values, and ongoing softness in billings at architecture firms contribute to the slowdown,” AIA said in a press release.

In the report, AIA predicts the following: Commercial facilities activity will be flat this year and next year; manufacturing will increase 14% and stabilize in 2025; institutional construction will see a more than 10% gain this year and slow to 4% in 2025.

“The disparity in sector performance highlights the uneven economic conditions and ongoing market uncertainties,” AIA Chief Economist Kermit Baker said in the release. “Despite the challenges, specific sectors like manufacturing construction are showing strong ongoing activity from the surge in projects that started during the pandemic, while most institutional sectors are seeing reasonably healthy gains, fueled by the education market.”

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