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
Steel Buildings | Feb 10, 2015
Korean researchers discover 'super steel'
The new alloy makes steel as strong as titanium.
Museums | Feb 9, 2015
Herzog & de Meuron's M+ museum begins construction in Hong Kong
When completed, M+ will be one of the first buildings in the Foster + Partners-planned West Kowloon Cultural District.
Multifamily Housing | Feb 9, 2015
GSEs and their lenders were active on the multifamily front in 2014
Fannie Mae and Freddie Mac securitized more than $57 billion for 850,000-plus units.
Contractors | Feb 9, 2015
Construction firms reach highest employment total since February 2009
Construction employers added 39,000 jobs in January and 308,000 over the past year, reaching the highest employment total since February 2009.
BIM and Information Technology | Feb 8, 2015
BIM for safety: How to use BIM/VDC tools to prevent injuries on the job site
Gilbane, Southland Industries, Tocci, and Turner are among the firms to incorporate advanced 4D BIM safety assessment and planning on projects.
Museums | Feb 6, 2015
Tacoma Art Museum's new wing features sun screens that operate like railroad box car doors
The 16-foot-tall screens, operated by a hand wheel, roll like box car doors across the façade and interlace with a set of fixed screens.
Cultural Facilities | Feb 6, 2015
Architects look to ‘activate’ vacant block in San Diego with shipping container-based park
A team of alumni from the NewSchool of Architecture and Design in San Diego has taken over a 28,500-sf empty city block in that metro to create what they hope will be a revenue-generating urban park.
Multifamily Housing | Feb 6, 2015
Fannie Mae to offer lower interest rates to LEED-certified multifamily properties
For certified properties, Fannie Mae is now granting a 10 basis point reduction in the interest rate of a multifamily refinance, acquisition, or supplemental mortgage loan.
Codes and Standards | Feb 6, 2015
Obama executive order requires federal construction projects to consider flood damage caused by climate change
To meet the new standard, builders must build two feet above the currently projected elevation for 100-year floods for most projects.
HVAC | Feb 6, 2015
ASHRAE, REHVA publish guide to chilled beam systems
The guide provides tools and advice for designing, commissioning, and operating chilled-beam systems.