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
| Apr 19, 2012
KTGY Group’s Arista Uptown Apartments in Broomfield, Colo. completed
First of eight buildings highlights unique amenities.
| Apr 19, 2012
Nauset begins work on $20M Joint Forces HQ at Hanscom AFB
3D imaging key to project timetable and cost containment.
| Apr 19, 2012
HBD Construction names Steven Meeks vice president
Meeks will provide expertise for the company in its many diverse areas of construction projects including health care, senior living, education and retail.
| Apr 18, 2012
Lafarge moving North American headquarters to Illinois
Lafarge CEO John Stull says the factors in their decision were location in the Midwest and area transportation.
| Apr 18, 2012
Positive conditions persist for Architecture Billings Index
The AIA reported the March ABI score was 50.4, following a mark of 51.0 in February; greatest demand is for commercial building projects.
| Apr 18, 2012
Syska Hennessy re-launches Information and Communication Technology practice
The ICT practice will focus a blend of products including Information Technology, Security, Audiovisual, Building Automation, Fire Life Safety, Medical Communications and Intelligent Building Systems.
| Apr 18, 2012
Perkins+Will designs new complex for Johns Hopkins Hosptial
The Charlotte R. Bloomberg Children’s Center and the Sheikh Zayed Tower create transformative patient-centric care.
| Apr 18, 2012
BBS Architects & Engineers acquires Ward Associates
The merged companies’ on-going project portfolio valued at $220 million.
| Apr 17, 2012
Princeton Review releases “Guide to 322 Green Colleges”
The guide profiles 322 institutions of higher education in the U.S. and Canada that demonstrate notable commitments to sustainability in their academic offerings, campus infrastructure, activities and career preparation.
| Apr 17, 2012
FMI report examines federal construction trends
Given the rapid transformations occurring in the federal construction sector, FMI examines the key forces accelerating these changes, as well as their effect on the industry.