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
| Feb 16, 2012
Summit Design + Build begins build-out for Emmi Solutions in Chicago
The new headquarters will total 20,455 sq. ft. and feature a loft-style space with exposed masonry and mechanical systems, 15 foot clear ceilings, two large rooftop skylights and private offices with full glass partition walls.
| Feb 16, 2012
Highland named president of McCarthy Building Companies’ California region
Highland moved into this new role in January 2012 following a six-month transition period with Carter Chappell, the company’s former president, California region.
| Feb 16, 2012
Big-box retailers not just for DIYers
Nearly half of all contractor purchases made from stores like Home Depot and Lowe's.
| Feb 16, 2012
4.8-megawatt solar power system completed at Jersey Gardens Mall
Solar array among the largest rooftop systems in North America.
| Feb 15, 2012
Fourth-generation Ryan to lead Ryan Companies AE team
Ryan leads a team of eight architects, four civil engineers, two landscape architects and two virtual building specialists in their efforts to realize their customer’s vision and needs through Ryan’s integrated project delivery system.
| Feb 15, 2012
NAHB sees gradual improvement in multifamily sales for boomers
However, since the conditions of the current overall housing market are limiting their ability to sell their existing homes, this market is not recovering as quickly as might have been expected.
| Feb 15, 2012
Skanska secures $87M contract for subway project
The construction value of the project is $261.9 M. Skanska will include its full share, $87 M, in the bookings for Skanska USA Civil for the first quarter 2012.
| Feb 15, 2012
Code allowance offers retailers and commercial building owners increased energy savings and reduced construction costs
Specifying air curtains as energy-saving, cost-cutting alternatives to vestibules in 3,000-square-foot buildings and larger has been a recent trend among consulting engineers and architects.
| Feb 15, 2012
Englewood Construction announces new projects with Destination Maternity, American Girl
Englewood’s newest project for Wisconsin-based doll retailer American Girl, the company will combine four vacant storefronts into one large 15,000 square-foot retail space for American Girl.
| Feb 14, 2012
Angelo State University opens doors to new recreation center expansion
Designed by SmithGroup, the JJR_Center for Human Performance offers enhanced fitness options, dynamic gathering space.