Nonresidential construction spending crested the $700 billion mark on a seasonally adjusted annualized basis in January for the first time since March 2009, according to analysis of U.S. Census Bureau data released today by Associated Builders and Contractors (ABC).
Nonresidential construction spending expanded 2.5% on a monthly basis and 12.3% on a yearly basis, totaling $701.9 billion. The Census Bureau upwardly revised December's estimate from $681.2 billion to $684.5 billion, though they downgraded November's figure from $683.7 to $680.5 million. Private nonresidential construction spending increased by 1% for the month, while its public counterpart expanded by 4.6%.
"After several months of relatively weak nonresidential construction spending data, today's data release was most welcome," ABC Chief Economist Anirban Basu said. "While January is a difficult month to interpret and one that should not be overly emphasized, the fact of the matter is that the year-over-year performance in spending is consistent with a host of industry indicators. For many months, the average contractor has been reporting decent backlog. Measures of industry confidence have remained stable even in the face of adverse news coming from various parts of the world.
"While the nonresidential construction spending recovery appears to remain in place, the industry's overall outlook remains murky," Basu said. "The global economy remains weak, and domestic corporate profitability has been slipping. The U.S. economic recovery continues to be under-diversified, with consumers continuing to lead the way. If corporate profitability continues to struggle, given falling exports and a general lack of confidence among CEOs, the pace of employment growth will slow over the course of 2016. That will presumably affect consumer spending, which is already being hampered by rising health care costs. That, in turn, could jeopardize the ongoing economic recovery, now on its way to completing its seventh year."
Spending increased in January on a monthly basis in 10 of 16 nonresidential construction sectors:
- Spending in the highway and street category expanded 14.6% from December 2015 and is 33.9 higher than in January 2015.
- Sewage and waste disposal-related spending expanded 4% for the month and 1.4% from the same time last year.
- Spending in the amusement and recreation category climbed 0.7% on a monthly basis and 16.9% on a year-over-year basis.
- Conservation and development-related spending is 10% higher on a monthly basis and 1.6% higher on a yearly basis.
- Lodging-related spending is up 6.3% for the month and is up 34.8% on a year-ago basis.
- Spending in the religious category grew 4.2% for the month and 0.2% from January 2015.
- Manufacturing-related spending expanded 4.2% on a monthly basis and is up 11.3% on a yearly basis.
- Spending in the power category expanded 2.9% from December 2015 and is 8.1% higher than in January 2015.
- Water supply-related spending expanded 2% on a monthly basis but fell 7.9% on a yearly basis.
- Spending in the office category grew 0.2% from December 2015 and is up 19.6% from January 2015.
Spending in six of the nonresidential construction subsectors fell in January on a monthly basis:
- Commercial-related construction spending fell 4.3% for the month but grew 0.8% on a year-over-year basis.
- Educational-related construction spending fell 1.1% on a monthly basis, but expanded 12.1% on a yearly basis.
- Transportation-related spending fell 2.5% month-over-month, but expanded 0.6% year-over-year.
- Health care-related spending fell 0.1% month-over-month but is up 1.8% year-over-year.
- Public safety-related spending is down 1.5% for the month and 3.2% from the same time one year ago.
- Communication-related spending fell by 4.2% month-over-month but expanded 27.2% year-over-year.
Related Stories
Contractors | Jul 13, 2023
Construction input prices remain unchanged in June, inflation slowing
Construction input prices remained unchanged in June compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics Producer Price Index data released today. Nonresidential construction input prices were also unchanged for the month.
Contractors | Jul 11, 2023
The average U.S. contractor has 8.9 months worth of construction work in the pipeline, as of June 2023
Associated Builders and Contractors reported that its Construction Backlog Indicator remained unchanged at 8.9 months in June 2023, according to an ABC member survey conducted June 20 to July 5. The reading is unchanged from June 2022.
Market Data | Jul 5, 2023
Nonresidential construction spending decreased in May, its first drop in nearly a year
National nonresidential construction spending decreased 0.2% in May, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.06 trillion.
Apartments | Jun 27, 2023
Average U.S. apartment rent reached all-time high in May, at $1,716
Multifamily rents continued to increase through the first half of 2023, despite challenges for the sector and continuing economic uncertainty. But job growth has remained robust and new households keep forming, creating apartment demand and ongoing rent growth. The average U.S. apartment rent reached an all-time high of $1,716 in May.
Industry Research | Jun 15, 2023
Exurbs and emerging suburbs having fastest population growth, says Cushman & Wakefield
Recently released county and metro-level population growth data by the U.S. Census Bureau shows that the fastest growing areas are found in exurbs and emerging suburbs.
Contractors | Jun 13, 2023
The average U.S. contractor has 8.9 months worth of construction work in the pipeline, as of May 2023
Associated Builders and Contractors reported that its Construction Backlog Indicator remained unchanged at 8.9 months in May, according to an ABC member survey conducted May 20 to June 7. The reading is 0.1 months lower than in May 2022. Backlog in the infrastructure category ticked up again and has now returned to May 2022 levels. On a regional basis, backlog increased in every region but the Northeast.
Industry Research | Jun 13, 2023
Two new surveys track how the construction industry, in the U.S. and globally, is navigating market disruption and volatility
The surveys, conducted by XYZ Reality and KPMG International, found greater willingness to embrace technology, workplace diversity, and ESG precepts.
| Jun 5, 2023
Communication is the key to AEC firms’ mental health programs and training
The core of recent awareness efforts—and their greatest challenge—is getting workers to come forward and share stories.
Contractors | May 24, 2023
The average U.S. contractor has 8.9 months worth of construction work in the pipeline, as of April 2023
Contractor backlogs climbed slightly in April, from a seven-month low the previous month, according to Associated Builders and Contractors.
Multifamily Housing | May 23, 2023
One out of three office buildings in largest U.S. cities are suitable for residential conversion
Roughly one in three office buildings in the largest U.S. cities are well suited to be converted to multifamily residential properties, according to a study by global real estate firm Avison Young. Some 6,206 buildings across 10 U.S. cities present viable opportunities for conversion to residential use.