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
| Jan 30, 2012
Siemens and Air-Ex Team deliver building controls training to Mt. San Antonio College students
Siemens contributes training modules and technology to support hands-on courses.
| Jan 30, 2012
Hollister Construction Services to renovate 30 Montgomery Street in Jersey City, N.J.
Owner Onyx Equities hires firm to oversee comprehensive upgrades of office building.
| Jan 27, 2012
Caterpillar reports record sales and profit for 4Q and full-year 2011
Momentum carries into 2012 with sales and revenues outlook raised to $68 to $72 billion.
| Jan 27, 2012
Smith Seckman Reid opens two new offices
Smith Seckman Reid, Inc. (SSR), an engineering design and facility consulting firm, has opened two new offices, one in Chicago, the other in Washington, D.C.
| Jan 27, 2012
BRB Architects designs new campus center for Molloy College
Intended to be the centerpiece of the College’s transformation from a commuter college to a 24-hour learning community, the “Public Square” will support student life with spaces such as a café, lounges, study rooms, student club space, a bookstore and an art gallery.
| Jan 27, 2012
Columbia University’s New Core Laboratory aims for LEED Silver
Construction manager Sordoni Construction Co. along with the design team of Payette Architects and Vanderweil Engineers will provide design and construction services to renovate the majority of the existing Core Lab building to create the new Lamont Center for Bio-Geochemistry.
| Jan 26, 2012
World of Concrete 2012: A tinge of optimism
Cement consumption is expected to increase significantly in 2013, the first time an increase has been predicted in the past five years.
| Jan 26, 2012
Three dead, 16 missing in Rio buildings collapse
The buildings, one 20 floors high, collapsed on Wednesday night in a cloud of dust and smoke just one block away from the city's historic Municipal Theater.
| Jan 26, 2012
Siemens launches smoke detection knowledge center
New knowledge center web site demonstrates efficacy of smoke detection.
| Jan 26, 2012
HOK partners with USGBC on design of Haiti children's center
Passive design principles give form to a sustainable, restorative environment for the children of Haiti.