Architectural Services NAICS 541310

Jan 20, 2026 - Nonresidential Building Spending to Remain Sluggish Through 2027

• Construction spending for nonresidential buildings is expected to remain sluggish in 2026 and 2027, according to the American Institute of Architects’ (AIA) Consensus Construction Forecast released in January. Total spending for nonresidential building construction is expected to rise just 1% in 2026 and 2.2% in 2027. For the next two years, commercial facility growth will be led by data centers, with spending rising 26.3% in 2026 and 16.5% in 2027. However, offices are expected to see a sharp decline in spending over the forecast period while warehouse and retail will see weak growth this year and modest gains in 2027. Manufacturing construction spending will fall 3.9% in 2026 and drop 2.8% next year. Spending on institutional projects will grow 2.7% this year and 2.8% in 2027, led by steady growth in the health sector, but educational, and amusement and recreation project spending will remain relatively flat.
• Design firm Gensler’s 2026 Design Forecast signals a major shift for the architecture industry, arguing that traditional measures of real estate value are giving way to experience, adaptability, and deeper integration of artificial intelligence, according to Architect Magazine. The report frames 2026 as a turning point that will require architects to design spaces that are flexible, emotionally resonant, and resilient to economic and climate pressures. It urges firms to embrace AI as a creative partner that can accelerate prototyping and reveal new behavioral insights in building occupancy. The forecast also calls for reimagining workplaces, hybridizing single use buildings, and prioritizing climate ready design. The report suggests that architectural firms will increasingly depend on blending data driven intelligence with human imagination.

• Contractors are entering 2026 with subdued expectations as economic uncertainty, tariffs, immigration enforcement, and persistent labor shortages weigh on confidence, even as demand for data centers and power projects remains strong. The Associated General Contractors of America’s latest outlook shows contractors are optimistic about data center growth, with 65% expecting the market to grow, but contractor sentiment regarding education, lodging, office, and retail construction all declined sharply compared to last year. Many firms report project delays or cancellations due to financing challenges and rising material and labor costs, and more than 80% struggle to fill both craft and salaried positions. Despite these pressures, most contractors still plan to expand their workforce and are increasing investment in artificial intelligence to boost efficiency and manage risk.
• The Dodge Momentum Index (DMI) increased 7% in December 2025 to 296.8 (2000=100), up from the upwardly revised November reading of 277.7. The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which has been shown to lead construction spending for nonresidential buildings by a full year. On a monthly basis, the commercial planning component improved by 3.5%, while the institutional component rose by 14.9%. For the commercial sector, steady planning levels for data centers, office buildings, and warehouses provided a boost. Institutional planning increased amid stronger educational and recreational activity, while public building planning dropped from highs seen earlier in the year. Dodge’s associate director of forecasting, Sarah Martin, suggested that planning activity would likely remain nominal amid inflationary pressures and elevated economic risk.