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
| Apr 16, 2012
Freeland promoted to vice president at Heery International
Recently named to Building Design+Construction’s 40 Under 40 Class of 2012.
| Apr 16, 2012
University of Michigan study seeks to create efficient building design
The result, the researchers say, could be technologies capable of cutting the carbon footprint created by the huge power demands buildings place on the nation’s electrical grid.
| Apr 16, 2012
UNT lab designed to study green energy technologies completed
Lab to test energy technologies and systems in order to achieve a net-zero consumption of energy.
| Apr 16, 2012
Shawmut awarded Tag Heuer builds in Florida and Pennsylvania
Both projects are scheduled to be completed this spring.
| Apr 16, 2012
Batson-Cook breaks ground on senior living center in Brunswick, Ga.
Marks the third Benton House project constructed by Batson-Cook.
| Apr 16, 2012
Altoon + Porter Architects renamed Altoon Partners
The global practice, with offices in Los Angeles, Amsterdam, and Shanghai, specializes in retail, residential and mixed-use developments.
| Apr 16, 2012
Drake joins EYP as science and technology project executive
Drake’s more than 30 years of diversified design and project delivery experience spans a broad range of complex building types.
| Apr 16, 2012
$80 million in export financing for solar project in India
The project, “Rajasthan Sun Technique Energy Private Limited,” is a subsidiary of Reliance Power and is being co-financed by the Asian Development Bank and FMO, the Dutch development bank.
| Apr 13, 2012
Arcadis merges with Davis Langon & Seah
Merger will help company expand business in Asia.
| Apr 13, 2012
Goettsch Partners designs new music building for Northwestern
The showcase facility is the recital hall, an intimate, two-level space with undulating walls of wood that provide optimal acoustics and lead to the stage, as well as a 50-foot-high wall of cable-supported, double-skin glass
