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
| Dec 20, 2010
Architect Adrian D. Smith on zero-energy cities, new technologies, and high density.
Adrian D. Smith, FAIA, RIBA, is co-founder (with Gordon Gill) of Adrian Smith + Gordon Gill Architecture, Chicago. Previously, he was a design partner in the Chicago office of Skidmore, Owings & Merrill (1980-2003) and a consulting design partner from 2004 to 2006. His landmark structures include the Jin Mao Tower (Shanghai), Rowes Wharf (Boston), and Burj Khalifa (Dubai, U.A.E.), the world’s tallest structure. He recently collaborated with Gordon Gill to design the world’s first net-zero-energy skyscraper, Pearl River Tower, now nearing completion in Guangzhou, China. This account is based on his recent remarks at the Illinois Institute of Technology.
| Dec 17, 2010
BIM Tools Enhance Project Value
The Building Team for a renovation project at Georgia Tech uses BIM and 3D design tools to solve a complex millwork problem.
| Dec 17, 2010
Historic Rhode Island hotel reborn with modern amenities
The iconic Ocean House resort in Watch Hill, R.I., had to be torn down in 2005 when systemic deficiencies made restoration unfeasible. Centerbrook Architects and Planners, Centerbrook, Conn., designed a new version of the hotel, working with preservation societies to save or recreate favorite elements of the original building, and incorporating them into the contemporary structure. The new resort has 49 guest rooms and 23 residences, plus banquet halls, a corporate boardroom, a private clubroom, a spa and fitness center, an indoor lap pool, a bar, and the obligatory international croquet court. Dimeo Construction, Providence, R.I., was the construction manager.
| Dec 17, 2010
Gemstone-inspired design earns India’s first LEED Gold for a hotel
The Park Hotel Hyderabad in Hyderabad, India, was designed by Skidmore, Owings & Merrill to combine inspirations from the region’s jewelry-making traditions with sustainable elements.
| Dec 17, 2010
Condominium and retail building offers luxury and elegance
The 58-story Austonian in Austin, Texas, is the tallest residential building in the western U.S. Benchmark Development, along with Ziegler Cooper Architects and Balfour Beatty (GC), created the 850,000-sf tower with 178 residences, retail space, a 6,000-sf fitness center, and a 10th-floor outdoor area with a 75-foot saltwater lap pool and spa, private cabanas, outdoor kitchens, and pet exercise and grooming areas.
| Dec 17, 2010
Sam Houston State arts programs expand into new performance center
Theater, music, and dance programs at Sam Houston State University have a new venue in the 101,945-sf, $38.5 million James and Nancy Gaertner Performing Arts Center. WHR Architects, Houston, designed the new center to connect two existing buildings at the Huntsville, Texas, campus.
| Dec 17, 2010
Alaskan village school gets a new home
Ayagina’ar Elitnaurvik, a new K-12 school serving the Lower Kuskikwim School District, is now open in Kongiganak, a remote Alaskan village of less than 400 residents. The 34,000-sf, 12-classroom facility replaces one that was threatened by river erosion.
| Dec 17, 2010
Luxury condos built for privacy
A new luxury condominium tower in Los Angeles, The Carlyle has 24 floors with 78 units. Each of the four units on each floor has a private elevator foyer. The top three floors house six 5,000-sf penthouses that offer residents both indoor and outdoor living space. KMD Architects designed the 310,000-sf structure, and Elad Properties was project developer.
| Dec 17, 2010
Subway entrance designed to exude Hollywood charm
The Hollywood/Vine Metro portal and public plaza in Los Angeles provides an entrance to the Red Line subway and the W Hollywood Hotel. Local architect Rios Clementi Hale Studio designed the portal and plaza to flow with the landmark theaters and plazas that surround it.
| Dec 17, 2010
New engineering building goes for net-zero energy
A new $90 million, 250,000-sf classroom and laboratory facility with a 450-seat auditorium for the College of Electrical and Computer Engineering at the University of Illinois at Urbana/Champaign is aiming for LEED Platinum.
