Nonresidential construction spending dipped for a second consecutive month, falling 0.4% on a monthly basis in December, according to analysis of U.S. Census Bureau data released by Associated Builders and Contractors (ABC). Nonresidential construction spending totaled $681.2 billion on a seasonally adjusted, annualized basis. November's nonresidential construction spending estimate was revised lower by 0.6% to $683.7 billion.
For a second consecutive month, 12 of 16 nonresidential subsectors experienced spending decreases on a monthly basis. Private nonresidential spending dipped 2.1% for the month, while public sector spending expanded 2.2%.
"December's estimate is a bit unnerving not only because it represents a second consecutive month of spending decline, but also because unusually warm temperatures should have helped to translate into better spending performance," ABC Chief Economist Anirban Basu said. "A number of leading indicators suggest that nonresidential construction spending performance will remain choppy moving forward, both for the broader economy and the nation's nonresidential construction segment, including the Baltic Dry Index, the Conference Board's Index of Leading Economic Indicators and the Architecture Billings Index.
"This is not to suggest that the nonresidential recovery will end in the near term," Basu said. "Most firms continue to report healthy backlog and hiring remains aggressive, implying that many firms are staffing up in order to perform on forthcoming contractual opportunities. However, private credit is beginning to tighten and becoming more expensive. Consumer delinquencies are edging higher and corporate bond defaults have been climbing. Accordingly, many contractors may experience a slowdown in backlog accumulation in 2016, with the 2017-2018 economic outlook remaining decidedly murky."
Only four of 16 nonresidential construction sectors experienced spending increases in December on a monthly basis:
- Spending in the highway and street category expanded by 9.6% on a monthly basis and 11.7% on a yearly basis.
- Communication-related spending increased 4% month over month and 37.2% year over year.
- Sewage and waste disposal-related spending expanded 1.3% for the month, but fell 9.7% from the same time last year.
- Spending in the amusement and recreation category climbed 0.5% on a monthly basis and 9.2% on a year-over-year basis.
Spending in 12 of the nonresidential construction subsectors fell in December on a monthly basis:
- Spending in the power category fell 0.3% from November 2015, but is 7.6% higher than in December 2014.
- Commercial-related construction spending fell 0.6% for the month and 3.2% for the year.
- Educational-related construction spending fell 0.8% on a monthly basis, but expanded 10% on a yearly basis.
- Transportation-related spending fell 0.8% month over month, but expanded 2.3% year over year.
- Lodging-related spending was down 1.3% for the month, but is up 29.1% on a year-ago basis.
- Spending in the office category fell 1.8% from November 2015, but is up 16.6% from December 2014.
- Water supply-related spending fell 2.9% on a monthly basis and 6.6% on a yearly basis.
- Health care-related spending fell 3.2% month over month, but is up 0.4% year over year.
- Spending in the religious category fell 4.1% for the month and 1.7% for the year.
- Public safety-related spending declined 4.6% for the month and 7.4% for the year.
- Manufacturing-related spending fell 7.2% from November 2015, but is 19.6% higher than in December 2014.
- Conservation and development-related spending declined 9.9% on a monthly basis and is 8% lower on a yearly basis.
Related Stories
| Dec 18, 2019
Reconsidering construction robotics
After decades when experts predicted that robots would become more prevalent on construction sites, it would appear that the industry has finally reached that point where necessity, aspiration, and investment are colliding.
75 Top Building Products | Dec 16, 2019
Top Window and Door Products for 2019
Pella’s Rolscreen retractable screen and NanaWall’s HSW single-track sliding glass wall are among the 16 window and door products to make Building Design+Construction’s 2019 101 Top Products report.
75 Top Building Products | Dec 16, 2019
Top Structural Products for 2019
Inpro’s Fireline 140 fire barrier and Owens Corning’s Foamglas cellular glass insulation are among the 10 structural products to make Building Design+Construction's 2019 101 Top Products report.
75 Top Building Products | Dec 16, 2019
101 Top Products for 2019
Building Design+Construction readers and editors select their top building products for the past 12 months in the fourth-annual 101 Top Products report.
75 Top Building Products | Dec 16, 2019
Top Plumbing Products for 2019
Sloan's CX Flushometer and Zip Water's HydroTap are among the eight plumbing products to make Building Design+Construction's 2019 101 Top Products report.
75 Top Building Products | Dec 16, 2019
Top Interior Building Products for 2019
Arktura's Delta Drop ceiling and CertainTeed's Decoustics Rondolo wood panels are among the 13 new interior products to make Building Design+Construction's 2019 101 Top Products report.
75 Top Building Products | Dec 16, 2019
Top Glass and Glazing Products for 2019
SageGlass's Harmony dynamic glass and Vitro Architectural Glass's Acuity low-iron glass are among the nine new glass and glazing products to make Building Design+Construction's 2019 101 Top Products report.
75 Top Building Products | Dec 16, 2019
Top Flooring Products for 2019
Tarkett’s aviation-inspired flooring collection and J+J Flooring’s textile composite flooring are among the four new commercial flooring products to make Building Design+Construction’s 2019 101 Top Products report.
75 Top Building Products | Dec 16, 2019
Top Building Systems Products for 2019
FabricAir’s ceiling-hung fabric duct and Ellumi Lighting’s bacteria-killing lights are among the 13 new building systems products to make Building Design+Construction's 2019 101 Top Products report.
75 Top Building Products | Dec 12, 2019
Top Building Envelope Products for 2019
Sto's beetle-inspired exterior coating and Dörken Systems' UV-resistant vapor-permeable barrier are among the 28 new building envelope products to make Building Design+Construction's 2019 101 Top Products report.