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
Office Buildings | Jan 27, 2015
London plans to build Foggo Associates' 'can of ham' building
The much delayed high-rise development at London’s 60-70 St. Mary Axe resembles a can of ham, and the project's architects are embracing the playful sobriquet.
Multifamily Housing | Jan 22, 2015
Sales of apartment buildings hit record high in 2014
Investors bet big time on demand for rental properties over homeownership in 2014, when sales of apartment buildings hit a record $110.1 billion, or nearly 15% higher than the previous year.
| Jan 21, 2015
From technician to rainmaker: Making the leap in your career
Many AEC firms focus on training for the hard skills of the profession, not so much for business prowess, writes BD+C's David Barista.
Modular Building | Jan 21, 2015
Chinese company 3D prints six-story multifamily building
The building components were prefabricated piece by piece using a printer that is 7 meters tall, 10 meters wide, and 40 meters long.
| Jan 21, 2015
Tesla Motors starts construction on $5 billion battery plant in Nevada
Tesla Motors’ “gigafactory,” a $5 billion project on 980 acres in Sparks, Nev., could annually produce enough power for 500,000 electric cars.
| Jan 20, 2015
Daring hotel design scheme takes the shape of cut amethyst stone
The Dutch practice NL Architects designed a proposal for a chain of hotels shaped like a rock cut in half to reveal a gemstone inside.
| Jan 20, 2015
Avery Associates unveils plans for London's second-tallest tower
The 270-meter tower, dubbed the No. 1 Undershaft, will stand next to the city's "Cheesegrater" building.
| Jan 19, 2015
HAO unveils designs for a 3D movie museum in China
New York-based HAO has released designs for the proposed Bolong 3D Movie Museum & Mediatek in Tianjin.
| Jan 19, 2015
Gaudi’s first work outside Spain will be a chapel in Chile
Nearly 100 years after Antoni Gaudí’s death, Chile will begin constructing a chapel using his designs.
| Jan 19, 2015
Architecture for Humanity closes office, plans to file for bankruptcy
After more than 15 years of work, the nonprofit design group Architecture for Humanity has closed its San Francisco office and plans to file for Chapter 7 bankruptcy protection.