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
| Dec 5, 2011
Gables Residential brings mixed-use building to Houston's Tanglewood area
The design integrates a detailed brick and masonry facade, acknowledging the soft pastel color palette of the surrounding Mediterranean heritage of Tanglewood.
| Dec 5, 2011
SchenkelShultz Architecture designs Dr. Phillips Charities Headquarters building in Orlando
The building incorporates sustainable architectural features, environmentally friendly building products, energy-efficient systems, and environmentally-sensitive construction practices.
| Dec 2, 2011
What are you waiting for? BD+C's 2012 40 Under 40 nominations are due Friday, Jan. 20
Nominate a colleague, peer, or even yourself. Applications available here.
| Dec 2, 2011
Legrand joins White House initiative to spur energy efficiency in commercial buildings
Company agrees to aggressive energy savings and reporting.
| Dec 2, 2011
Goody Clancy awarded Ohio State residential project
The project, which is focused on developing a vibrant on-campus community of learning for OSU undergraduates.
| Dec 1, 2011
Nauset Construction breaks ground on Massachusetts health care center
The $20 million project is scheduled to be completed by December 2012.
| Dec 1, 2011
Ground broken on first LEED Platinum designed school house built by volunteers
Phoenix public school receives the generous gift of a state-of-the-art building for student and community use.
| Dec 1, 2011
VLK Architects’ office receives LEED certification
The West 7th development, which houses the firm’s office, was designed to be LEED for Core & Shell, which gave VLK the head start on finishing out the area for LEED Silver Certification CI.
| Nov 29, 2011
First EPD awarded to exterior roof and wall products manufacturer
EPD is a standardized, internationally recognized tool for providing information on a product’s environmental impact.