Nonresidential construction in the United States is expected to healthily increase in 2022, but only after a continued decline throughout 2021, according to the AIA. In their mid-year Consensus Construction Forecast for July 2021, the organization projects that nonresidential construction spending will decline an additional 3.9% this year, following on from a 2% decline in 2020. However, 2022 will see a return to growth with a projected 4.6% increase.

For the remainder of 2021, healthcare is the only sector expected to see positive growth, with a projected increase of 1.4%. Meanwhile, the largest decline is anticipated to be hotels, declining by 19.9% this year. In 2022, however, hotels are expected to rebound strongly with an 18.9% increase in spending. The only two sectors expected to see a decline across both 2021 and 2022 are offices (5.6% decline in 2021, 0.1% decline in 2022), and religious buildings (0.9% decline in 2021, 0.9% decline in 2022).

Despite this expected growth, the AIA warns that several obstacles may alter the construction spending landscape. Post-pandemic inflation, an unreliable global supply chain, a potential housing bubble, and labor shortages, may all impact and alter the AIA’s projections between now and 2022. There are also reasons for optimism, however, including continued growth in demand for architectural retrofitting services, and an injection of capital from a potential new infrastructure package emerging from Congress.

“Even while momentum is developing behind most of the nonresidential building sectors, there are several potential potholes on the road to a construction recovery,” says AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “Inflation is back on the radar screen given the surge in consumer spending, as well as the growing federal debt levels. Also, the global supply chain continues to face serious challenges that persist even well after initial pandemic related disruptions have largely subsided.” 

The forecast is the latest in a number of recent insights into the design and construction sector. Last week, the AIA published their latest Architecture Billings Index, showing economic recovery amongst a looming hiring crunch. Also last week, a report from the federal government found that U.S. residential construction is accelerating, but that not all regions are feeling it. Last month, meanwhile, an AIA survey found that the demand for larger homes has increased for the first time in five