The Real Deal Miami

Commercial construction spending to decline

July 13, 2009 02:13PM

Construction spending on offices, retail centers, and hotels is expected to drop 16 percent this year and 12 percent in 2010, according to the American Institute of Architects. The institute, which in January predicted an 11 percent drop this year and a 5 percent drop in 2010, cited rising unemployment and reductions in business spending as the reason for the 6 percent increase for this year. Spending on office buildings is expected to fall 22 percent this year and 17 percent in 2010, retail construction is expected to decrease 28 percent this year and 13 percent in 2010, and hotel construction is likely to sink 26 percent this year and 17 percent in 2010, according to the institute. Kermit Baker, the institute’s chief economist, said those numbers are indicative of the overall economic climate. “Why do you build new office buildings? You need to see job numbers pick up,” Baker said. “Why do you build new retail centers? You need to see consumer spending pick up.”