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.
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
| Jan 2, 2013
Construction jobs made gains in 2012, even with a slow Q4, says Gilbane report
The construction sector in the nine states with 50% of construction employment was up 169,000 jobs from February to September 2012, following a lost of 137,000 jobs from September 2011 to January 2012.
| Dec 21, 2012
ABI gains for fourth straight month
Positive business conditions for all building sectors.
| Dec 13, 2012
LPCiminelli opens New York City office
Steve Giordano named executive in charge of new office.
| Dec 9, 2012
Greenzone pop quiz
Greenbuild attendees share their thoughts with BD+C on the SAGE modular classroom.
| Dec 9, 2012
Modular classroom building makes the grade
SAGE modular classroom opens eyes, minds at Greenbuild 2012.
| Dec 9, 2012
14 great solutions
Welcome to the third installment of Building Design+Construction’s “Great Solutions,” highlighting 14 innovative technologies and products that you can put to work in your next project.
| Dec 9, 2012
D’ambrosio joins BD+C’s editorial board
D’Ambrosio, a 2009 selection to the magazine’s “40 Under 40” galaxy of AEC superstars, holds a bachelor’s in architectural engineering from the Pennsylvania State University.