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Despite recent reports of an impending U.S. economic downturn, industry insiders are forecasting growth in the construction sector
The eyes of economic world have been keenly focused on recent reports of an impending U.S. recession forecasted for the upcoming year. This coupled with newly imposed tariffs and the ongoing trade war with China, has caused a great deal of trepidation on the world stage.
The architectural industry can rest easy however, according to the American Institute of Architects (AIA). The AIA published their annual Consensus Construction Forecast in July of this year, forecasting a growth of 3.8 in the current year for the nonresidential segment. They've further suggested next year's growth could be as much as 2.4% as compared to 2018.
These forecasts were further bolstered by a report from ResearchAndMarkets.com recent publication of "Construction in the US - Key Trends and Opportunities to 2022" at the end of June. Their anaysis focused on the compound annual growth rate (CAGR) of the entire U.S. construction industry from 2018 through 2022, and concluded an increase of 2.22% over the forecast period.
All this good news is not without some caveats however. An AIA chief economist, in a summary of their forecast, goes on to say that the overall outlook is "cautiously optimistic". The threat of a recession in 2020, coupled with the President Trump's trade tariffs could result in weakening business confidence. U.S. manufacturers are already being forced to absorb the additional costs incurred as a result of the tariffs. Assa Abloy added a 3% tariff fee to many of their product lines at the beginning of August.
Despite growing concerns of recession and a general attitude of despair in the mainstream media, the architectural industry can still look forward to positive growth in the short term.
The following are links to articles that speak directly to the construction industry outlook and provide additional details on the projections:
Pacheco, Antonio. "Despite Trump's damaging tariffs, AIA forecasts continued economic growth in nonresidential construction into 2020" archinect.com, https://archinect.com/news/article/150147366/despite-trump-s-damaging-tariffs-aia-forecasts-continued-economic-growth-in-nonresidential-construction-into-2020. Accessed 10 September, 2019.
Wood, Laura. "United States Construction Market Outlook 2018-2022 - Output Value Expected to Rise at a CAGR of 2.22% Over the Forecast Period" researchandmarkets.com, https://www.researchandmarkets.com/reports/4699943/construction-in-the-us-key-trends-and. Accessed 10 September, 2019.
Wang, T. "U.S. Construction Industry - Statistics & Facts" statista.com, https://www.statista.com/topics/974/construction. Accessed 10 September, 2019.
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