Nonresidential construction spending fell in September for the first time in eight months, the U.S. Census Bureau reported, but the monthly drop in spending is not a cause for concern according to analysis by Associated Builders and Contractors (ABC). Nonresidential construction spending fell by 0.1% from August, totaling $692.8 billion on a seasonally adjusted annualized basis.
September's year-over-year increase of 12.4% is the largest increase since April 2008. After falling in two consecutive months, public nonresidential construction spending grew by 0.7% in September while private sector construction spending fell by 0.7% for the month.
"The last several months have generally been associated with sizable increases in nonresidential construction," said ABC Chief Economist Anirban Basu. "Today's release, while not particularly upbeat, does not alter the fact that nonresidential construction spending continues to recover and that most contractors are busier than they were a year ago.
"Although there are many potential forces at work that resulted September's monthly construction spending decline, most are not alarming. With construction materials prices falling, contractors may be able to offer somewhat lower prices for their services, helping to suppress growth in construction value put in place. It is also conceivable that some construction work is being slowed by an ongoing lack of available skilled personnel. This factor has certainly helped to slow residential construction, and it seems reasonable to presume that some nonresidential contractors would face similar issues.
Â
Â
Seven nonresidential construction sectors experienced spending increases in September on a monthly basis:
- Educational-related spending expanded by 2% for the month and 11.5% for the year.
- Spending in the religious category grew by 5.6% on a monthly basis and 0.8% year-over-year.
- Amusement and transportation-related spending rose by 0.2% from August and 30.6% from September of last year.
- Transportation-related spending expanded by 1.6% from a month ago and 10.2% from a year ago.
- Highway and street-related construction spending inched 0.3% higher for the month and is up 10% from the same time last year.
- Sewage and waste disposal-related spending rose by 1.1% from August and 12.9% from September of last year.
- Spending in the water supply category gained 4.3% from the previous month and 5.6% on a year-ago basis.
Spending in nine nonresidential construction subsectors fell in September on a monthly basis:
- Spending in the lodging category fell by 0.7% for the month but is up 32.8% from September 2014.
- Office-related spending dipped 0.4% from August but is 19.3% higher than at the same time last year.
- Spending in the commercial category fell by 1.1% on a monthly basis and by 2% on a yearly basis.
- Health care-related spending inched 0.1% lower for the month but is up 9% on a year-ago basis.
- Public safety-related spending fell 3% month-over-month and 4.8% year-over-year.
- Spending in the communication-category declined 2.7% from August but is up 10.2% from the same time last year.
- Power-related construction spending fell 1.7% on a monthly basis but expanded 1.9% over the previous twelve months.
- Conservation and development-related spending lost 6% for the month but is still 1.6% higher than at the same time last year.
- Manufacturing related spending fell 0.4% for the month but is still up 41.3% from September 2014.
To view the previous spending report, click here.
Related Stories
Giants 400 | Nov 19, 2021
2021 Cultural Facilities Giants: Top architecture, engineering, and construction firms in the U.S. cultural facilities sector
Gensler, AECOM, Buro Happold, and Arup top BD+C's rankings of the nation's largest cultural facilities sector architecture, engineering, and construction firms, as reported in the 2021 Giants 400 Report.
Giants 400 | Nov 19, 2021
2021 Convention Center Sector Giants: Top architecture, engineering, and construction firms in the U.S. convention and conference facilities sector
Populous, KPFF, Lendlease, and Turner Construction top BD+C's rankings of the nation's largest convention and conference facilities architecture, engineering, and construction firms, as reported in the 2021 Giants 400 Report.
Giants 400 | Nov 18, 2021
2021 Multifamily Sector Giants: Top architecture, engineering, and construction firms in the U.S. multifamily building sector
Clark Group, Humphreys and Partners, and Kimley-Horn head BD+C's rankings of the nation's largest multifamily building sector architecture, engineering, and construction firms, as reported in the 2021 Giants 400 Report.
2021 Building Team Awards | Nov 17, 2021
Caltech's new neuroscience building unites scientists, engineers to master the human brain
The Tianqiao and Chrissy Chen Institute for Neuroscience at the California Institute of Technology in Pasadena wins a Gold Award in BD+C's 2021 Building Team Awards.
Architects | Nov 9, 2021
Download BD+C’s 2021 Design Innovation Report
AEC and development firms share where new ideas come from, and what makes them click.
Architects | Nov 9, 2021
Download BD+C’s 10 Predictions for the Construction Industry in 2022
Our prognostications focus on how AEC firms will streamline and modernize their projects and operations.
Movers+Shapers | Nov 7, 2021
Passage of $1.2 trillion infrastructure bill expected to spur stronger construction activity
AEC firms see federal investment as historic
Contractors | Nov 4, 2021
Coping with labor and material shortages in construction
Learn how New York-based Denham Wolf Real Estate Services is helping its nonprofit builder clients minimize delays and cost overruns from labor and materials shortages. Ron Innocent, Director of Project Management with Denham Wolf Real Estate Services sits down with BD+C's John Caulfield.
Contractors | Nov 3, 2021
RC Andersen Construction to join the STO Building Group
Merger extends both firms’ capabilities for clients in the industrial/distribution sector.
Contractors | Nov 2, 2021
Building profits: Working with a construction-cost manager
Working with an independent cost manager may be a new concept for some owners, but it holds promise of saving them money and time.