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
| Jan 3, 2012
Callison acquires Barteluce Architects & Associates
This acquisition will grow Callison’s New York team to over 75 architects.
| Jan 3, 2012
VDK Architects merges with Harley Ellis Devereaux
Harley Ellis Devereaux will relocate the employees in its current Berkeley, Calif., office to the new Oakland office location effective January 3, 2012.
| Jan 3, 2012
Weingarten, Callan appointed to BD+C Editorial Board
Building Design+Construction has named two new members to its editorial board. Both are past recipients of BD+C’s “40 Under 40” honor.
| Jan 3, 2012
New Chicago hospital prepared for pandemic, CBR terror threat
At a cost of $654 million, the 14-story, 830,000-sf medical center, designed by a Perkins+Will team led by design principal Ralph Johnson, FAIA, LEED AP, is distinguished in its ability to handle disasters.
| Jan 3, 2012
BIM: not just for new buildings
Ohio State University Medical Center is converting 55 Medical Center buildings from AutoCAD to BIM to improve quality and speed of decision making related to facility use, renovations, maintenance, and more.
| Jan 3, 2012
New SJI Rule on Steel Joists
A new rule from the Steel Joist Institute clarifies when local reinforcement of joists is required for chord loads away from panel points. SJI members offer guidance about how and when to specify loads.
| Jan 3, 2012
AIA Course: New Developments in Concrete Construction
Earn 1.0 AIA/CES learning units by studying this article and successfully completing the online exam.
| Jan 3, 2012
The Value of Historic Paint Investigations
An expert conservator provides a three-step approach to determining a historic building’s “period of significance”—and how to restore its painted surfaces to the correct patterns and colors.
| Jan 3, 2012
28th Annual Reconstruction Awards: Bringing Hope to Cancer Patients
A gothic-style structure is reconstructed into comfortable, modern patient residence facility for the American Cancer Society.
| Jan 3, 2012
Art Gensler: Still Making a Difference for Clients Every Day
After running what is today the largest architecture firm in the world for more than four decades, M. Arthur Gensler, Jr., FAIA, FIIDA, RIBA, is content to be just another employee at the firm that bears his name.