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
Building Team | Oct 18, 2022
Brasfield & Gorrie chairman’s home vandalized by anti-development activists
Activists vandalized the home and vehicles of Miller Gorrie, chairman of Birmingham-based Brasfield & Gorrie, in protest of a planned $90 million, 85-acre police, fire and public safety training center in Atlanta.
Mixed-Use | Oct 18, 2022
Mixed-use San Diego tower inspired by coastal experience and luxury travel
The new 525 Olive mixed use San Diego tower was inspired by the coastal experience and luxury travel.
University Buildings | Oct 18, 2022
A carbon-neutral-ready university campus opens in Hong Kong
In early September, the Hong Kong University of Science and Technology (HKUST) officially opened its new, KPF-designed campus in Nansha, Guangzhou (GZ).
Market Data | Oct 17, 2022
Calling all AEC professionals! BD+C editors need your expertise for our 2023 market forecast survey
The BD+C editorial team needs your help with an important research project. We are conducting research to understand the current state of the U.S. design and construction industry.
Codes and Standards | Oct 17, 2022
Ambitious state EV adoption goals put pressure on multifamily owners to provide chargers
California’s recently announced ban on the sale of new gas-powered vehicles starting in 2035—and New York’s recent decision to follow suit—are putting pressure on multifamily property owners to install charging stations for tenants.
Contractors | Oct 17, 2022
Interior Investments, LLC, joins PARIC Holdings family of companies
PARIC Holdings announced that Interior Investments, LLC, has joined the PARIC Holdings family of companies. This strategic collaboration will leverage the strengths and expertise of each organization to deliver a comprehensive suite of turnkey services to best support their customers.
Justice Facilities | Oct 17, 2022
San Antonio’s new courthouse aims to provide safety and security while also welcoming the public
The San Antonio Federal Courthouse, which opened earlier this year, replaces a courthouse that had been constructed as a pavilion for the 1968 World’s Fair.
Market Data | Oct 14, 2022
ABC’s Construction Backlog Indicator Jumps in September; Contractor Confidence Remains Steady
Associated Builders and Contractors reports today that its Construction Backlog Indicator increased to 9.0 months in September, according to an ABC member survey conducted Sept. 20 to Oct. 5.
| Oct 13, 2022
Boston’s proposed net-zero emissions code has developers concerned
Developers have raised serious concerns over a proposed new energy code by the City of Boston that would require newly constructed buildings over 20,000 sf to immediately hit net-zero emissions goals.
Education Facilities | Oct 13, 2022
A 44-acre campus serves as a professional retreat for public-school educators in Texas
A first-of-its-kind facility for public schools in Texas, the Holdsworth Center serves as a retreat for public educators, supporting reflection and dialogue.