Spending on Nonresidential Building Construction Continues to Slow
Spending on nonresidential construction is projected to increase only 1.7 percent this year and grow very modestly to just 2.0 percent next year, according to the AIA mid-year Consensus Construction Forecast.
WASHINGTON – July 22, 2025 – Spending on nonresidential construction is projected to increase only 1.7 percent this year and grow very modestly to just 2.0 percent next year, according to The American Institute of Architects (AIA) mid-year Consensus Construction Forecast.
The outlook by the AIA Consensus Construction Forecast panel – consisting of leading economic forecasters – estimates the commercial sector outlook is about on par with the broader industry, with a projected 1.5 percent increase this year rising to 3.9 percent in 2026. Spending on the construction of manufacturing facilities – the industry bright spot in recent years – is expected to decline 2.0 percent this year with an additional declined of 2.6 percent next year. Institutional facilities are expected to be the strongest sector with projected gains of 6.1 percent this year and another 3.8 percent in 2026.
“A multitude of factors are preventing substantive growth in nonresidential construction,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “Stubbornly high long-term interest rates, falling consumer confidence scores, rising tariff rates for many inputs to construction and construction labor shortages exacerbated by restrictive immigration policies are limiting prospects for positive sustained growth.”
Complete details on the latest Consensus Construction Forecast
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The ABI remained in negative territory in May with a score of 47.2, up from 43.2 in April.
