Following the announcement by the US Bureau of Statistics that construction spending fell by 2.1% in May from a month earlier:
Dariana Tani, Economist at GlobalData, a leading data and analytics company, offers her view on the situation:
“May’s construction spending data shows the ongoing weakness in the US construction industry amid the COVID-19 pandemic. Overall, construction spending was driven down by a decline in spending on private construction projects offsetting an increase in spending on public projects.
“GlobalData expects the US construction industry to contract by -6.5% in 2020 and -2% in 2021, down from the previous growth forecast of 0.6% and 1.4% before the COVID-19 pandemic started. Sectors such as commercial, residential and industrial are anticipated to be the hardest hit amid the collapse in business and consumer confidence, while sectors such as institutional and infrastructure will also be affected although to a lesser extent.
“As Congress and the White House contemplate the next phase of yet another unprecedented government response to limit the economic impact of the COVID-19 outbreak, Democrats and President Donald Trump are increasingly raising the prospects of passing a multi-trillion dollar infrastructure plan that could generate millions of jobs and stimulate the economy and the construction industry. However, key risks remain. With the number of new COVID-19 cases surging across the country, as many states are reopening their economies, the construction industry is expected to continue to decline over the coming months.
“A second wave in the second half of 2020 and the potential increase of caseloads in underserved communities could put at risk the recovery of the labor market and increase the risk that the pandemic could result in long-lasting damage to the economy as new lockdown restrictions will have to be put in place again. Furthermore, heightening political uncertainty over the upcoming presidential election, lower oil prices, and financial volatility are other factors that could undermine confidence.”
Related Stories
Building Team | Nov 1, 2022
Nonresidential construction spending increases slightly in September, says ABC
National nonresidential construction spending was up by 0.5% in September, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau.
Hotel Facilities | Oct 31, 2022
These three hoteliers make up two-thirds of all new hotel development in the U.S.
With a combined 3,523 projects and 400,490 rooms in the pipeline, Marriott, Hilton, and InterContinental dominate the U.S. hotel construction sector.
Codes and Standards | Oct 26, 2022
‘Landmark study’ offers key recommendations for design-build delivery
The ACEC Research Institute and the University of Colorado Boulder released what the White House called a “landmark study” on the design-build delivery method.
Building Team | Oct 26, 2022
The U.S. hotel construction pipeline shows positive growth year-over-year at Q3 2022 close
According to the third quarter Construction Pipeline Trend Report for the United States from Lodging Econometrics (LE), the U.S. construction pipeline stands at 5,317 projects/629,489 rooms, up 10% by projects and 6% rooms Year-Over-Year (YOY).
Designers | Oct 19, 2022
Architecture Billings Index moderates but remains healthy
For the twentieth consecutive month architecture firms reported increasing demand for design services in September, according to a new report today from The American Institute of Architects (AIA).
Market Data | Oct 17, 2022
Calling all AEC professionals! BD+C editors need your expertise for our 2023 market forecast survey
The BD+C editorial team needs your help with an important research project. We are conducting research to understand the current state of the U.S. design and construction industry.
Market Data | Oct 14, 2022
ABC’s Construction Backlog Indicator Jumps in September; Contractor Confidence Remains Steady
Associated Builders and Contractors reports today that its Construction Backlog Indicator increased to 9.0 months in September, according to an ABC member survey conducted Sept. 20 to Oct. 5.
Market Data | Oct 12, 2022
ABC: Construction Input Prices Inched Down in September; Up 41% Since February 2020
Construction input prices dipped 0.1% in September compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data released today.
Laboratories | Oct 5, 2022
Bigger is better for a maturing life sciences sector
CRB's latest report predicts more diversification and vertical integration in research and production.
Market Data | Aug 25, 2022
‘Disruptions’ will moderate construction spending through next year
JLL’s latest outlook predicts continued pricing volatility due to shortages in materials and labor
