The nonresidential building sector is expected to rebound through 2023 after a slow recovery with the broader economy last year, according to a new report from the American Institute of Architects. 

The AIA’s Consensus Construction Forecast for December 2021, comprising leading economic forecasters, expects spending on nonresidential building construction to increase by 5.4 percent in 2022 and jump to a 6.1 percent increase in 2023. Last year saw a five percent decline in construction spending on buildings, with only retail and other commercial, industrial, and health care facilities managing spending increases. This year, only the hotel, religious, and public safety sectors are expected to continue to decline. 

Given ongoing challenges with Covid-19 and its variants, supply chain disruptions, inflation, and labor shortages, the outlook for the nonresidential building market still looks promising going forward. As detailed by AIA, one indication of this projection is the recent upturn in design activity at architecture firms. After a decline in January of last year, architecture firms reported strong growth in billings for the remainder of 2021, yielding the highest average scores for the Architecture Billings Index since 2007. 2021 saw a reported 6% average increase in revenue at architecture firms. This year, further growth is expected, at 7% on average. 

“The pandemic, supply chain disruptions, growing inflation, labor shortages, and the potential passage of all or part of the Build Back Better legislation could have a dramatic impact on the construction sector this year,” said AIA Chief Economist Kermit Baker. “Challenges to the economy and the construction industry notwithstanding, the outlook for the nonresidential building market looks promising for this year and next.”