Blame it on the weather. That's what many economists have been doing over the past two months as economic data continue to disappoint. Retail sales, durable goods orders, and other categories have not been as strong as anticipated.
Nonresidential construction has often proved an exception, with the industry's momentum gaining steam recently. However, in February, nonresidential construction spending remained virtually unchanged, inching down 0.1% on a monthly basis, according to the April 1 release from the U.S. Census Bureau.
The February 2015 spending figure is 4.6% higher than February 2014, as spending for the month totaled $611.5 billion on a seasonally adjusted annualized basis. The estimate for January spending was revised downward, from $614.1 billion to $611.9 billion, while the government revised December's spending estimate upward from $627 billion to $629.3 billion.
"Construction is impacted more by weather than just about any economic segment, and the impact of February's brutal weather is evident in the government's spending figure," said Associated Builders and Contractors Chief Economist Anirban Basu. "ABC continues to forecast a robust nonresidential construction spending recovery in 2015, despite the most recent monthly data, with the obvious exceptions of industry segments most directly and negatively impacted by declines in energy prices.
"The broader U.S. economy has not gotten off to as good a start in 2015 as many had expected with consumer spending growth frustrated by thriftier than anticipated shoppers," said Basu. "With winter behind us and temperatures warming, the expectation is that economic growth will roar back during the second quarter, which is precisely what happened last year. To the extent that this proves to be true, nonresidential construction's recovery can be expected to persist."
Seven of 16 nonresidential construction subsectors posted increases in spending in February on a monthly basis.
- Manufacturing-related spending expanded 6.8 percent in February and is up 37.9% on a year-over-year basis.
- Conservation and development-related construction spending expanded 11% for the month and is up 19.8% on a yearly basis.
- Office-related construction spending expanded 2.4% in February and is up 19% from the same time one year ago.
- Amusement and recreation-related construction spending gained 2% on a monthly basis and is up 22.5% from the same time last year.
- Education-related construction spending grew 0.3% for the month, but is down 0.6% on a year-over-year basis.
- Construction spending in the transportation category grew 0.6% on a monthly basis and has expanded 9.3% on an annual basis.
- Lodging-related construction spending was up 5% on a monthly basis and 10.4% on a year-over-year basis.
Spending in nine nonresidential construction subsectors failed to rise in February.
- Healthcare-related construction spending fell 0.9% for the month and is down 4.5% for the year.
- Spending in the water supply category dropped 7.8% from January, but is still 7.4% higher than at the same time last year.
- Public safety-related construction spending lost 2.2% on a monthly basis and is down 9.6% on a year-over-year basis.
- Commercial construction spending lost 1.9% in February, but is up 13.5% on a year-over-year basis.
- Religious spending fell 4.8% for the month and is down 10.3% from the same time last year.
- Sewage and waste disposal-related construction spending shed 1.4% for the month, but has grown 19.9% on a 12-month basis.
- Power-related construction spending fell 4.5% for the month and is 17.2% lower than at the same time one year ago.
- Lodging construction spending is down 4.4% on a monthly basis, but is up 18.2% on a year-over-year basis.
- Sewage and waste disposal-related construction spending shed 7.5% for the month, but has grown 16% on a 12-month basis.
- Power-related construction spending fell 1.1% for the month and is 13.2% lower than at the same time one year ago.
- Communication-related construction spending fell 6.1% for the month and is down 15.5% for the year.
- Highway and street-related construction spending was unchanged in February and is up 3.3% compared to the same time last year.
To view the previous spending report, click here.
Related Stories
Mass Timber | Dec 1, 2022
Cross laminated timber market forecast to more than triple by end of decade
Cross laminated timber (CLT) is gaining acceptance as an eco-friendly building material, a trend that will propel its growth through the end of the 2020s. The CLT market is projected to more than triple from $1.11 billion in 2021 to $3.72 billion by 2030, according to a report from Polaris Market Research.
Giants 400 | Dec 1, 2022
Top 40 Parking Structure Contractors + CM Firms for 2022
PCL Construction, Balfour Beatty, McCarthy Holdings, and Level 10 Construction top the ranking of the nation's largest parking structure contractors and construction management (CM) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report.
Contractors | Nov 30, 2022
Construction industry’s death rate hasn’t improved in 10 years
Fatal accidents in the construction industry have not improved over the past decade, “raising important questions about the effectiveness of OSHA and what it would take to save more lives,” according to an analysis by Construction Dive.
75 Top Building Products | Nov 30, 2022
75 top building products for 2022
Each year, the Building Design+Construction editorial team evaluates the vast universe of new and updated products, materials, and systems for the U.S. building design and construction market. The best-of-the-best products make up our annual 75 Top Products report.
K-12 Schools | Nov 30, 2022
School districts are prioritizing federal funds for air filtration, HVAC upgrades
U.S. school districts are widely planning to use funds from last year’s American Rescue Plan (ARP) to upgrade or improve air filtration and heating/cooling systems, according to a report from the Center for Green Schools at the U.S. Green Building Council. The report, “School Facilities Funding in the Pandemic,” says air filtration and HVAC upgrades are the top facility improvement choice for the 5,004 school districts included in the analysis.
Retail Centers | Nov 29, 2022
'Social' tenants play a vital role in the health of the retail center market
After a long Covid-induced period when the public avoided large gatherings, owners of malls and retail lifestyle centers are increasingly focused on attracting tenants that provide opportunities for socialization. Pent-up demand for experiences involving gatherings of people is fueling renovations and redesigns of large retail developments.
Giants 400 | Nov 28, 2022
Top 130 Office Sector Contractors and CM Firms for 2022
Turner Construction, STO Building Group, Gilbane, and CBRE top the ranking of the nation's largest office sector contractors and construction management (CM) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report.
Legislation | Nov 23, 2022
7 ways the Inflation Reduction Act will impact the building sector
HOK’s Anica Landreneau and Stephanie Miller and Smart Surfaces Coalition’s Greg Kats reveal multiple ways the IRA will benefit the built environment.
Multifamily Housing | Nov 22, 2022
10 compelling multifamily developments debut in 2022
A smart home tech-focused apartment complex in North Phoenix, Ariz., and a factory conversion to lofts in St. Louis highlight the notable multifamily developments to debut recently.
Industrial Facilities | Nov 16, 2022
Industrial building sector construction, while healthy, might also be flattening
For all the hoopla about the ecommerce boom and “last mile” order fulfillment driving demand for more warehouse and manufacturing space, construction of industrial buildings actually declined over the past five years, albeit marginally by 2.1% to $27.3 billion in 2022, according to estimates by IBIS World. Still, construction in this sector remains buzzy.
