National nonresidential construction spending rose 2.4% in January, according to an Associated Builders and Contractors analysis of U.S. Census Bureau data released today. At a seasonally adjusted annualized rate, nonresidential spending totaled $762.5 billion for the month, an increase of 4.8% over the previous year. Public nonresidential construction spending expanded 4.9% in January and private spending increased 0.8%. Both public and private nonresidential spending are up 8.5% and 2.4%, respectively, on a yearly basis.
“An uptick in investment in certain infrastructure categories has been at the center of the ongoing nonresidential construction spending cycle,” said ABC Chief Economist Anirban Basu. “During the past year, construction spending has increased at rapid rates in conservation and development, highway and street, and transportation. While there has been much discussion about expanding infrastructure investment at the federal level, most of that investment has taken place at a state and local level, especially as government finances have improved in much of the nation, therefore supplying more support for infrastructure outlays. Significant job growth also has helped bolster income tax collections while rising real estate values have triggered improved property tax collections.
“Meanwhile, still reasonably strong consumer spending has helped support growing construction in segments like lodging,” said Basu. “Construction of data and fulfillment centers also has created demand for nonresidential construction services. The recent moderation in construction materials price increases has helped support construction starts because more developers and their financiers are concluding that new projects make business sense.
“While there has been some reduction in business and consumer confidence, the nonresidential construction spending cycle remains firmly in place for now,” said Basu. “Despite the recent dip in ABC’s Construction Backlog Indicator, backlogs remain sufficient to support solid nonresidential spending activity through the balance of 2019. And while many economists remain concerned about economic prospects in 2020 and beyond, nonresidential construction’s outlook remains benign at least into 2021.”
Related Stories
Market Data | Jun 21, 2019
Architecture billings remain flat
AIA’s Architecture Billings Index (ABI) score for May showed a small increase in design services at 50.2.
Market Data | Jun 19, 2019
Number of U.S. architects continues to rise
New data from NCARB reveals that the number of architects continues to increase.
Market Data | Jun 12, 2019
Construction input prices see slight increase in May
Among the 11 subcategories, six saw prices fall last month, with the largest decreases in natural gas.
Market Data | Jun 3, 2019
Nonresidential construction spending up 6.4% year over year in April
Among the 16 sectors tracked by the U.S. Census Bureau, nine experienced an increase in monthly spending, led by water supply and highway and street.
Market Data | Jun 3, 2019
4.1% annual growth in office asking rents above five-year compound annual growth rate
Market has experienced no change in office vacancy rates in three quarters.
Market Data | May 30, 2019
Construction employment increases in 250 out of 358 metros from April 2018 to April 2019
Demand for work is outpacing the supply of workers.
Market Data | May 24, 2019
Construction contractors confidence remains high in March
More than 70% of contractors expect to increase staffing levels over the next six months.
Market Data | May 22, 2019
Slight rebound for architecture billings in April
AIA’s ABI score for April showed a small increase in design services at 50.5 in April.
Market Data | May 9, 2019
The U.S. hotel construction pipeline continues to grow in the first quarter as the economy shows surprising strength
Projects currently under construction stand at 1,709 projects/227,924 rooms.
Market Data | May 9, 2019
Construction input prices continue to rise
Nonresidential input prices rose 0.9% compared to March and are up 2.8% on an annual basis.