Construction spending on hotels, office buildings and retail centers may fall 13% this year, the second straight annual decline amid a drop in property prices, the American Institute of Architects said.
The Washington-based group’s forecast is more severe than an estimate it made in July, when it predicted a 12% decrease. Spending will turn 'marginally' higher in 2011, the group said today.
'The magnitude of the downturn has set in,' Kermit Baker, the group’s chief economist, said in an interview. This year’s expected drop compares with a decline of about 20 percent in 2009. 'Another bad year is the bottom line, but there are some prospects of recovery as we get into 2011.'