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
| Mar 21, 2012
Clary, Hendrickson named regional directors for HDR Architecture
New directors will be responsible for expanding and strengthening the firm throughout the central region.
| Mar 20, 2012
FMI releases 2012 first quarter construction outlook
The last time construction put in place was at this level was 2000-2001.
| Mar 20, 2012
Ceco Building Systems names Romans marketing director
Romans joins Ceco Building Systems with over 15 years in marketing and customer service.
| Mar 20, 2012
UT Arlington launches David Dillon Center for Texas Architecture
Symposium about Texas architecture planned for April.
| Mar 20, 2012
Stanford’s Knight Management Center Awarded LEED Platinum
The 360,000-sf facility underscores what is taught in many of the school’s electives such as Environmental Entrepreneurship and Environmental Science for Managers and Policy Makers, as well as in core classes covering sustainability across the functions of business.
| Mar 20, 2012
New office designs at San Diego’s Sunroad Corporate Center
Traditional office space being transformed into a modern work environment, complete with private offices, high-tech conference rooms, a break room, and an art gallery, as well as standard facilities and amenities.
| Mar 19, 2012
Obama’s positioned to out-regulate Bush in second term
Proposed ozone rule would cost $19 billion to $90 billion in 2020, according to the White House.
| Mar 19, 2012
Skanska promotes Saunders to VP/GM of Bayshore Concrete Products
During his more than 13 years with Bayshore, Saunders has provided products for Victory Bridge in New Jersey, Route 52 Causeway in Ocean City, N.J., and for numerous piers at Naval Station Norfolk and the Norfolk Naval Shipyard.
| Mar 19, 2012
Smith Carter joins forces with Genivar
Smith Carter has a workforce of some 190 employees and designs complex buildings in challenging environments.
| Mar 19, 2012
HKS Selected for Baylor Medical Center at Waxahachie
Baylor Medical Center at Waxahachiewill incorporate advanced technology including telemedicine, digital imaging, remote patient monitoring, electronic medical records and computer patient records.
