Expected 16 percent drop in construction costs of non-residential properties in the U.S.

Costs for construction of offices, shopping centers and hotels in the U.S. is likely to decrease by 16 percent this year and 12 percent in 2010, which is more than the previously estimated by the American Institute of Architects.
Growth of unemployment and shrinking corporate budgets have forced the Institute to revise its January forecast, when it expected that the costs of non-residential construction will decrease by 11 percent this year and 5 percent in 2010, says Bloomberg.
Confidence among U.S. consumers cut this month in view of the nearly 10 percent unemployment in the country according to Reuters index and University of Michigan. Bloomberg did a study showing that the economy probably is Svilen by 1.8 percent between April and June. Non-residential construction usually follows with some delay the movement of data on the economy, says mash Baker, chief economist of the Institute.
Costs for construction of office buildings is expected to decrease by 22 percent this year and a further 17 percent in 2010, while those for the construction of retail space will likely shrink by 28 percent this year and 13 percent the next, say, by the Architects.
Construction of hotels is likely to decrease by 26 percent this year and 17 percent in 2010 costs for the construction of industrial areas were expected to shrink by 0.8 percent this year and 28% in 2010
The analysis of the organization is based on estimates of Global Insight Inc., Moody’s Economy.com, Portland Cement Association and FMI Corp.

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