Nonresidential construction spending fell 0.4% on a monthly basis in March, according to analysis of U.S. Census Bureau data released today by Associated Builders and Contractors (ABC), but it was up 8.3% on a year-over-year basis to $695.7 billion. Eight of 16 nonresidential construction subsectors experienced monthly spending growth in March and twelve are up on a year-ago basis.
March would have recorded a monthly spending gain were it not for an upward revision to February's data (from $690.3 to $698.4 billion).
"Viewed optimistically, one can conclude that nonresidential construction has stabilized at a high level," said ABC Chief Economist Anirban Basu. "While the last several months have failed to deliver significant spending growth, many contractors indicate that they remain busy and that backlog levels are satisfactory. Still, one might have expected better spending growth performance given the combination of steady job growth nationally, large sums of capital coming from abroad and invested in the U.S. and surprisingly low interest rates.
"Based on recent trends, one concludes that many U.S. corporations remain reluctant to invest in large-scale projects," said Basu. "Nonresidential fixed investment has generally been soft over recent quarters, and has subtracted from GDP growth recently. America has been experiencing a corporate profits recession recently and slow growth. GDP expanded less than 2% on an annualized basis during last year's final quarter and less than 1% during this year's first. Combine that with hesitant government agencies, and one lacks a recipe for healthy nonresidential construction spending growth."
Spending has increased in 12 of the 16 construction subsectors over the past year. Three of the four sectors registering spending declines over that time — water supply, conservation and development, and public safety — rank among the four smallest subsectors. Each of these subsectors is also heavily influenced by public sector capital budgets.
Eight of 16 nonresidential construction sectors experienced spending increases in March on a monthly basis:
- Lodging-related spending was up 1% from February 2016 and is up 27.7% from March 2015;
- Health care-related spending expanded 1.6% month-over-month and is up 4.1% year-over-year;
- Commercial-related construction spending rose 1.2% for the month and 14.5% over the last year;
- Conservation and development-related spending was 1.6% higher on a monthly basis, but is 3.3% lower on a year-over-year basis.
- Spending in the religious category grew 5.2% for the month and is up 6.4% from March 2015.
- Manufacturing-related spending gained 2% on a monthly basis, but is down 2.1% on a year-over-year basis.
- Communication-related spending grew 3.7% month-over-month and has expanded 10.4% year-over-year.
- Spending in the highway and street category expanded 0.5% from February and is 18.8 higher than one year ago.
Spending in eight of the nonresidential construction subsectors fell in March on a monthly basis:
- Spending in the amusement and recreation category fell 1% from February, but is up 9.6% from the same month one year ago.
- Education-related construction spending fell 0.6% on a monthly basis, but has expanded 11.8% on a yearly basis.
- Sewage and waste disposal-related spending fell 4.2% for the month, but is up 3.8% from the same time one year ago.
- Spending in the power category was down 3.2% from February, but is up 0.8% from a year ago.
- Water supply-related spending fell 1.6% on a monthly basis and has declined 6.1% on a yearly basis.
- Spending in the office category declined 1.3% from February, but is up 19.5% on a year-ago basis.
- Transportation-related spending fell 2.1% month-over-month and has expanded 1.2% year-over-year.
- Public safety-related spending is down 7.8% for the month and 12.3% from March 2015.
Related Stories
| Jan 17, 2015
When is a train station not a train station? When it’s a performance venue
You can catch a train at Minneapolis’s new Target Field Station. You can also share in an experience. That’s what ‘Open Transit’ is all about.
| Jan 16, 2015
Artsy lifeguard stations will brighten Toronto’s snowy beach
Five winning designs have been unveiled for lifeguard stands that will double as public space art installations on Toronto's beach.
| Jan 16, 2015
New York City construction costs continue to climb
A study released by the New York Building Congress shows that construction costs in Manhattan have risen 5% in each of the last two years.
| Jan 15, 2015
A reconstructed Taliesin West is the largest Frank Lloyd Wright LEGO Model [slideshow]
Artist Adam Reed Tucker used 180,000 LEGO pieces and 420 hours of work to recreate Frank Lloyd Wright's Taliesin West campus.
| Jan 15, 2015
Construction materials prices fall in November
Construction input prices dipped 1.4% during the final month of 2014 and are down nearly 1% on a year-over-year basis, according to the Jan. 15 producer price index release from the U.S. Department of Labor.
| Jan 15, 2015
Libeskind unveils 'zig zag' plan for recreational center near Vilnius ski area
Perched on the highest peak between Vilnius' historic quarter and downtown, the Vilnius Beacon will be a hub for visiting skiers and outdoor enthusiasts.
| Jan 14, 2015
10 change management practices that can ease workplace moves
No matter the level of complexity, workplace change can be a challenge for your client's employees. VOA's Angie Lee breaks down the process of moving offices as efficiently as possible, from creating a "change team" to hosting hard-hat tours.
| Jan 13, 2015
Steven Holl unveils design for $450 million redevelopment of Houston's Museum of Fine Arts
Holl designed the campus’ north side to be a pedestrian-centered cultural hub on a lively landscape with ample underground parking.
| Jan 9, 2015
Santiago Calatrava talks with BBC about St. Nicholas Church on Ground Zero
Calatrava reveals that he wanted to retain the “tiny home” feel of the original church building that was destroyed with the twin towers on 9/11.
| Jan 9, 2015
Nonresidential construction hiring surges in December 2014
The U.S. construction industry added 48,000 jobs in December, including 22,800 jobs in nonresidential construction, according to the Bureau of Labor Statistics preliminary estimate released Jan. 9.