Decoding Design

Report details economic impact of stalled architecture projects

Posting in Architecture

A new report from the American Institute of Architects outlines how delaying building projects is affecting the economy, as well as progress in eco-friendly construction.

Townhouses in Little Egg Harbor, New Jersey, unoccupied since their completion in 2007. Additonal buildings were planned for the site, but construction was abandoned due to the economic crisis.

A new report from the American Institute of Architects outlines how delaying building projects is affecting the economy, as well as progress in eco-friendly construction.

The report, "Stalled Construction Projects and Financing Problems: An Agenda to Keep Contruction of America’s Buildings and Infrastructure Going," points out that in the last three years, construction spending in the U.S. has declined by nearly $300 billion. This loss, the report states, accounts for a 2% decline in the overall size of the American economy.

Based on data from McGraw-Hill Construction and Reed Construction Data, the report (released on November 7 and available online as a PDF) illustrates what types of architecture projects are currently stalled--and why:

  • 26.5% are expected to receive LEED, Green Globes, or other green certification
  • Since 2008, 40% of reported stalled projects have moved ahead toward planning, design, or construction, but 60% were abandoned
  • 21% of stalled projects were delayed because of financing problems in 2011 (data was available through August), compared to 18% last year, and only 11% in 2008
  • The education and multi-family housing sectors are seeing the most stalled architecture projects, making up 33% and 21% of those reported, respectively
  • Manufacturing-related projects are seeing the least delays, only making up 3% of the total of reported stalled projects

"This report should lay to rest any doubt about what is a key source for holding back job creation in the United States," said Kermit Baker, chief economist of the AIA, in a statement. "It is the lack of financing especially to the design and construction sector, which accounts for $1 in $9 of U.S. Gross Domestic Product."

Clearly, from Baker's comment, the AIA's title of the report, and the organization's November 7 launch of a database for stalled projects looking for funding, the AIA hopes to provoke not only discussion but also action to stimulate the architecture and construction industries. And, of course, the U.S. economy as a whole.

Image: LancerE/Flickr

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Reena Jana

Contributing Editor

Contributing Editor Reena Jana has written for the New York Times, Wired, Harvard Business Review online, Fast Company, Architectural Record, Artforum, Time Out New York, Harper's Bazaar, and GQ. Previously, she was the innovation department editor at BusinessWeek. She holds degrees from Columbia University and Barnard College. Follow her on Twitter. Disclosure