Through the first five months of 2015, nonresidential construction spending is having its second best year since the Census Bureau began tracking the metric in 2002.
According to the July 1 release, nonresidential construction spending increased 1.1% on a month-over-month basis and 8.1% on a year-over-year basis, and totals $669.6 billion on a seasonally adjusted, annualized basis. From January to May, nonresidential spending expanded by 7.1%; the only year in which the segment saw faster growth was 2007. Since then, growth over each year's initial five months has averaged only 1.8%.
Perhaps the most notable aspect of May's release was the extensive upward revisions to three of the previous four months' data. January, February and April saw their nonresidential construction spending estimates revised upward by 2%, 1.4% and 2.4%, respectively. The Census Bureau also increased the estimate for May 2014 by 1.4%.
"Though there continues to be discontent regarding performance of the U.S. economy, the current situation should be viewed positively," said Associated Builders and Contractors Chief Economist Anirban Basu. "The U.S. economy has now entered the mid-cycle portion of its recovery, which often represents a period of sustained progress for the average nonresidential construction firm. As with prior months, the industry progress continues to be led by the private sector. Among private segments, manufacturing-related construction was at the frontline of construction spending growth in May."
"Moderate economic growth will allow interest rates to rise gradually, helping extend this mid-cycle," said Basu. "Although it took several years to get to this point of the recovery, contractors will find themselves steadily becoming busier, with margins gradually expanding. The principle obstacle to progress will be skilled labor shortages, which eventually will translate into faster inflation, rising interest rates and the move into the final stage of the current economic expansion."
Nine of 16 nonresidential construction sectors experienced spending increases in May:
· Manufacturing-related construction spending expanded 6.2% in May and is up by 69.5% for the year.
· Office-related construction spending expanded 1.6% in May and is up 24.6% compared to the same time one year ago.
· Lodging-related construction spending was up 3.2% on a monthly basis and 30.6% on a year-over-year basis.
· Lodging-related construction spending was up 5.5% on a monthly basis and 17.6% on a year-over-year basis.
· Spending in the water supply category expanded 0.9% from April, but is down 6.8% on an annual basis.
· Religious spending gained 1.4% for the month and is up 9.2% from the same time last year.
· Highway and street-related construction spending expanded 2.2% in May and is up 2.1% compared to the same time last year.
· Conservation and development-related construction spending grew 8.6% for the month and is up 27.3% on a yearly basis.
· Amusement and recreation-related construction spending gained 5.8% on a monthly basis and is up 29.8% from the same time last year.
· Communication-related construction spending gained 3.3% for the month and is up 15.7% for the year.
Spending in seven nonresidential construction subsectors fell in May:
· Education-related construction spending fell 0.8% for the month, but is up 1.8% on a year-over-year basis.
· Power-related construction spending remained flat for the month, but is 23.5% lower than the same time one year ago.
· Sewage and waste disposal-related construction spending fell 2.2% for the month, but has grown 13.3% on a 12-month basis.
· Public safety-related construction spending fell 7.9% on a monthly basis and is down 11.8% on a year-over-year basis.
· Commercial construction spending fell 1.7% in March, but is up 11.4% on a year-over-year basis.
· Health care-related construction spending fell 0.6% for the month, but is up 3.1% compared to the same time last year.
· Construction spending in the transportation category fell 0.9% on a monthly basis, but has expanded 5.4% on an annual basis.
Related Stories
| Jun 6, 2014
Must see: Can a floating city offset urban population growth in China?
AT Design Office has proposed a design for a floating city to offset increasing urban populations in China. To create the new city, a 10-square kilometer island would be made out of prefab blocks.
| Jun 6, 2014
KPF, Kevin Roche unveil design for 51-story Hudson Yards tower in NYC [slideshow]
Related Companies and Oxford Properties Group are teaming to develop Fifty Five Hudson Yards, the latest addition to the commercial office tower collection in the 28-acre Hudson Yards development—the largest private real estate development in the history of the U.S.
| Jun 6, 2014
Shipping container ship terminal completed in Spain
In Seville, Spain, architectural firms Hombre de Piedra and Buró4 have designed and completed a cruise ship terminal out of used shipping containers.
| Jun 5, 2014
International Parking Institute names best new parking structures
Winners include garages that are architectural delights, an airport's canopied parking atrium, and an environmentally friendly garage under America's oldest park.
| Jun 4, 2014
Want to design a Guggenheim? Foundation launches open competition for proposed Helsinki museum
This is the first time the Guggenheim Foundation has sought a design through an open competition. Anonymous submissions for stage one of the competition are due September 10, 2014.
| Jun 4, 2014
Market update: A difficult first quarter for construction spending comes to an end
This year's unusually difficult winter took its toll on construction activity. Nonetheless, first quarter spending for all the major groups was up compared to the same period in 2013.
| Jun 4, 2014
Construction team named for Atlanta Braves ballpark
A joint venture between Barton Malow, Brasfield & Gorrie, Mortenson Construction, and New South Construction will build the Atlanta Braves ballpark, which is scheduled to open in early 2017. Check out the latest renderings of the plan.
| Jun 3, 2014
Must see: World's tallest LEGO tower built in Budapest
The tower, built in front of St. Stephen's Basilica, is topped with a Rubik's cube and was built using thousands of blocks.
| Jun 3, 2014
Great leadership comes down to one thing
While it’s often said that strong leadership is an organization’s competitive advantage, is there a single characteristic that can predict which leaders will be most effective? SPONSORED CONTENT
| Jun 3, 2014
Libeskind's latest skyscraper breaks ground in the Philippines
The Century Spire, Daniel Libeskind's latest project, has just broken ground in Century City, southwest of Manila. It is meant to accommodate apartments and offices.