National nonresidential construction spending fell 1.2% in July, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, spending totaled $809.1 billion for the month.
Of the 16 nonresidential subcategories, 10 were down on a monthly basis. Private nonresidential spending declined 1.0% while public nonresidential construction spending was down 1.3% in July.
“There are two primary countervailing forces influencing the trajectory of nonresidential construction spending,” said Basu. “The first is a force for good and involves the reopening of the economy and associated rebound in overall economic activity. Despite the lingering pandemic, third quarter GDP growth is likely to be quite strong. All things being equal, this would tend to strengthen business for contractors.
'Next year is shaping up to be an especially harsh one for many contractors, especially as some are already indicating that they are nearing the end of their backlog. The wild card, as is often the case, is Congress.'
“However, the second force at work is not benign and appears to be the stronger of the two,” said Basu. “The crisis has resulted in tighter project financing conditions, battered state and local government finances, substantial commercial vacancy and uncertainty regarding the future of key segments, such as office and lodging. And while backlog was strong at the start of the year, contractors indicate that it is now declining rapidly, in part due to abundant project cancellations.”
“Next year is shaping up to be an especially harsh one for many contractors, especially as some are already indicating that they are nearing the end of their backlog,” said Basu. “The wild card, as is often the case, is Congress. Another stimulus package could go a long way toward improving the trajectory of overall nonresidential construction spending, particularly one with a sizable infrastructure component. The upshot is that declines in nonresidential construction spending are likely even in the context of broader economic recovery.”
Related Stories
| Sep 1, 2016
TRANSIT GIANTS: A ranking of the nation's top transit sector design and construction firms
Skidmore, Owings & Merrill, Perkins+Will, Skanska USA, Webcor Builders, Jacobs, and STV top Building Design+Construction’s annual ranking of the nation’s largest transit sector AEC firms, as reported in the 2016 Giants 300 Report.
| Sep 1, 2016
INDUSTRIAL GIANTS: A ranking of the nation's top industrial design and construction firms
Stantec, BRPH, Fluor Corp., Walbridge, Jacobs, and AECOM top Building Design+Construction’s annual ranking of the nation’s largest industrial sector AEC firms, as reported in the 2016 Giants 300 Report.
| Sep 1, 2016
HOTEL SECTOR GIANTS: A ranking of the nation's top hotel sector design and construction firms
Gensler, HKS, Turner Construction Co., The Whiting-Turner Contracting Co., Jacobs, and JBA Consulting Engineers top Building Design+Construction’s annual ranking of the nation’s largest hotel sector AEC firms, as reported in the 2016 Giants 300 Report.
| Sep 1, 2016
CULTURAL SECTOR GIANTS: A ranking of the nation's top cultural sector design and construction firms
Gensler, Perkins+Will, PCL Construction Enterprises, Turner Construction Co., AECOM, and WSP | Parsons Brinckerhoff top Building Design+Construction’s annual ranking of the nation’s largest cultural sector AEC firms, as reported in the 2016 Giants 300 Report.
| Sep 1, 2016
COURTHOUSE GIANTS: A ranking of the nation's top courthouse design and construction firms
DLR Group, NBBJ, Hensel Phelps, Sundt Construction, AECOM, and Dewberry top Building Design+Construction’s annual ranking of the nation’s largest courthouse sector AEC firms, as reported in the 2016 Giants 300 Report.
| Aug 30, 2016
CONVENTION CENTER GIANTS: A ranking of the nation's top convention center sector design and construction firms
Gensler, LMN Architects, AECOM, Turner Construction Co., and WSP | Parsons Brinckerhoff top Building Design+Construction’s annual ranking of the nation’s largest convention center sector AEC firms, as reported in the 2016 Giants 300 Report.
BIM and Information Technology | Aug 30, 2016
BIM GIANTS: A ranking of the nation's top BIM design and construction firms
HOK, Perkins+Will, Turner Construction Co., The Whiting-Turner Contracting Co., Jacobs, and Thornton Tomasetti top Building Design+Construction’s annual ranking of the nation’s largest BIM AEC firms, as reported in the 2016 Giants 300 Report.
Great Solutions | Aug 23, 2016
11 great solutions for the commercial construction market
A roll-up emergency department, next-gen telemedicine center, and biophilic cooling pods are among the AEC industry’s clever ideas and novel innovations for 2016.
| Aug 19, 2016
RECONSTRUCTION GIANTS: Facelifts give buildings new identities, even as they keep a few wrinkles
Reconstruction is always a balancing act between the client’s pro forma and what the building needs to be vibrant again.
| Aug 19, 2016
Top 110 Reconstruction Construction Firms
Gilbane Building Co., Turner Construction Co., and The Whiting-Turner Contracting Co. top Building Design+Construction’s annual ranking of the nation’s largest reconstruction sector construction and construction management firms, as reported in the 2016 Giants 300 Report.
