Architecture trade group the American Institute of Architects said in a press release issued on July 14 that commercial real estate construction is expected to decrease by more than 20 percent this year and will only see a marginal increase of just over three percent in 2011.
The AIA says that, even with modest improvements in the economy, poor CRE construction conditions persist because of oversupply, weak demand, a continued decline in commercial property values and a tight credit market.
When things do begin to turn around, the retail and hotel sectors are expected to see the strongest growth, according to AIA Chief Economist Kermit Baker, PhD.
For 2010, the AIA says that hotel construction will be down over 43 percent, office construction will lag 29 percent, retail will be down 25 percent and industrial space construction will be off by 21 percent. All categories except industrial are expected to see single-digit growth by the end of 2011.
For the full AIA press release, go here.