WASHINGTON (July 22, 2025) — Nonresidential construction spending is projected to increase only 1.7% this year and grow very modestly to just 2.0% 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% increase this year rising to 3.9% in 2026. Spending on the construction of manufacturing facilities — the industry bright spot in recent years — is expected to decline 2.0% this year with an additional declined of 2.6% next year. Institutional facilities are expected to be the strongest sector with projected gains of 6.1% this year and another 3.8% in 2026.
“A multitude of factors are preventing substantive growth in nonresidential construction,” said AIA Chief Economist Kermit Baker, Hon. AIA, Ph.D. “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.”
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