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
| Feb 28, 2012
McCarthy completes second phase of San Diego’s Scripps Hospital
Representing the second phase of a four-phased, $41.3 million expansion and remodeling project, the new addition doubles the size of the existing emergency department and trauma center to encompass a combined 27,000 square feet of space.
| Feb 28, 2012
LUMEnergi names Weinbaum president and CEO
Weinbaum’s experience spans communications, nanotechnology, electronics components, consumer products, semiconductors, software, wireless and lighting.
| Feb 28, 2012
Griffin Electric completes Medical University of South Carolina project
The 210,000-sf complex is comprised of two buildings, and houses research, teaching and office areas, plus conference spaces for the University.
| Feb 27, 2012
Consigli complete first building for Bigelow Ocean Sciences Campus
Designed by WBRC Architects Engineers in association with Perkins + Will.
| Feb 27, 2012
Hollister completes fit-out of 41,500-sf office space in Princeton, N.J.
Intricate interior project involved construction of more than 80 offices.
| Feb 27, 2012
Research Institute at Texas Children’s Hospital building receives LEED Gold
Innovative and sustainable design reflects best environmental building practices.
| Feb 26, 2012
Milwaukee U-Haul facility receives LEED-CI Silver
The new elements of the facility now include: efficient lighting with day-lighting controls and occupancy sensors, a high-efficiency HVAC system used in conjunction with a newly constructed thermal envelope to help reduce energy consumption, and the installation of low-flow fixtures to reduce water consumption.
| Feb 26, 2012
Hollister Construction awarded 42,000-sf office fit-out in Holtsville, N.Y.
Space leased by U.S. General Service Administration.
| Feb 26, 2012
Alvarez-Glasman & Colvin’s Chen LEED certified
Chen works closely with property owners to ensure that their properties meet and exceed all industry standards, and also provide long-term energy savings.