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
University Buildings | May 17, 2023
New UC Irvine health sciences building supports aim to become national model for integrative health
The new College of Health Sciences Building and Nursing & Health Sciences Hall at the University of California Irvine supports the institution’s goal of becoming a national model for integrative health. The new 211,660-sf facility houses nursing, medical doctorate, pharmacy, philosophy, and public health programs in a single building.
Sponsored | Building Enclosure Systems | May 16, 2023
4 steps to a better building enclosure
Dividing the outside environment from the interior, the building enclosure is one of the most important parts of the structure. The enclosure not only defines the building’s aesthetic, but also protects occupants from the elements and facilitates a comfortable, controlled climate. With dozens of components comprising the exterior assemblies, from foundation to cladding to roof, figuring out which concerns to address first can be daunting.
Multifamily Housing | May 16, 2023
Legislators aim to make office-to-housing conversions easier
Lawmakers around the country are looking for ways to spur conversions of office space to residential use.cSuch projects come with challenges such as inadequate plumbing, not enough exterior-facing windows, and footprints that don’t easily lend themselves to residential use. These conditions raise the cost for developers.
Headquarters | May 16, 2023
Workplace HQ for party clothing company Shinesty celebrates its bold, whimsical products
The new Denver headquarters for Shinesty, a party clothing company, was designed to match the brand’s fun image with an iconic array of colors, textures, and prints curated by the design agency, Maximalist. Shinesty’s mission, to challenge the world to live more freely and “take itself less seriously,” is embodied throughout the office interior.
Office Buildings | May 15, 2023
Sixteen-story office tower will use 40% less energy than an average NYC office building
This month marks the completion of a new 16-story office tower that is being promoted as New York City’s most sustainable office structure. That boast is backed by an innovative HVAC system that features geothermal wells, dedicated outdoor air system (DOAS) units, radiant heating and cooling, and a sophisticated control system to ensure that the elements work optimally together.
K-12 Schools | May 12, 2023
In Virginia, a new high school building helps reimagine the experience for 1,600 students
In Virginia, the City of Alexandria recently celebrated the topping out of a new building for Alexandria City High School. When complete in 2025, the high-performance structure will accommodate 1,600 students.
AEC Tech Innovation | May 12, 2023
Meet Diverge, Hensel Phelps' new ConTech investment company
Thai Nguyen, Director of Innovation with Hensel Phelps, discusses the construction giant's new startup investment platform, Diverge.
University Buildings | May 11, 2023
New ‘bold and twisting’ building consolidates School of Continuing Studies at York University
The design of a new building that consolidates York University’s School of Continuing Studies into one location is a new architectural landmark at the Toronto school’s Keele Campus. “The design is emblematic of the school’s identity and culture, which is centered around accelerated professional growth in the face of a continuously evolving labor market,” according to a news release from Perkins&Will.
Contractors | May 10, 2023
A mental health crisis in construction demands greater awareness about causes and prevention
Leaders at Suffolk and Home Base, America’s largest private sector clinic, urge OSHA to make mental health a greater priority in its training.
Hotel Facilities | May 9, 2023
A new camping destination near Utah’s Zion National Park offers a variety of all-season lodgings and amenities
Outdoor lodging brand AutoCamp has opened a new camping destination near Utah’s Zion National Park. A 16-acre property, AutoCamp Zion is located between the Virgin River and the desert of Southern Utah.