In its first-quarter index of Construction Confidence, the Associated Builders and Contractors (ABC) found that 55% of contractors expected their sales to increase over the following six months, and only 19% thought their sales would decline in that period.
They might need to recalibrate their exuberance, in light of the trade group’s latest analysis of data published by the U.S. Census Bureau, which ABC released today. It estimates that national nonresidential construction spending in May, at $784.5 billion, was down 7.1% from the same month a year ago, and off 0.7% from spending levels in April 2021.
On a year-over-year basis, spending for every nonresidential category that ABC tracks, except sewage and waste disposal, was negative. Spending on public safety projects—which surged during the early months of the pandemic—showed the greatest decline in May, 39.6%, and lodging also took a big hit (off 23.3% to $22.6 billion). On the other hand, spending in May on healthcare construction, nearly $47 billion, was down only marginally, by 1.5%, compared to the same month a year ago.
WORKER SHORTAGES AND MATERIAL PRICING REMAIN PROJECT ROADBLOCKS
Construction spending for public safety and lodging projects showed the steepest declines in May compared to the same month a year ago.
A red-hot data center market hasn’t spelled more office construction, notes Anirban Basu, ABC’s Chief Economist. Basu also points out that while some private construction segments are struggling under the dislocating impacts of the pandemic, public nonresidential construction actually has declined more rapidly than the private sector over the past year.
Basu sees some hope for the future. Public construction spending should benefit from improvements in state and local governments’ financial conditions. But he tempers his predictions because of still-high construction materials prices and “deeply problematic” worker shortages. Basu expressed some concern, too, about the disproportionate amount of spending moving toward residential construction, which accounted for 41% of the pre-pandemic total and 49% in May.
Related Stories
Contractors | Sep 23, 2021
Balfour Beatty’s outreach to veterans pays dividends in leadership and growth
Contracts for work it’s done for the San Diego Unified School District have extended to several disabled vet-owned businesses.
Multifamily Housing | Sep 22, 2021
11 notable multifamily projects to debut in 2021
A residence for older LGBTQ+ persons, a P3 student housing building, and a converted masonic lodge highlight the multifamily developments to debut this year.
Data Centers | Sep 22, 2021
Wasted energy from data centers could power nearby buildings
A Canadian architecture firm comes up with a concept for a community that’s part of a direct-current microgrid.
Hotel Facilities | Sep 22, 2021
Will hotel developers finally embrace modular construction?
Last May, MiTek, a construction software and building services company that’s part of Warren Buffett’s Berkshire Hathaway conglomerate, formed a partnership with Danny Forster & Architecture to promote modular design and construction.
Contractors | Sep 3, 2021
Construction demand continues to outpace the industry’s workforce capacity
Skilled worker shortages are causing project delays, and even cancellations, according to latest AGC-Autodesk survey.
Multifamily Housing | Sep 1, 2021
Top 10 outdoor amenities at multifamily housing developments for 2021
Fire pits, lounge areas, and covered parking are the most common outdoor amenities at multifamily housing developments, according to new research from Multifamily Design+Construction.
Giants 400 | Aug 30, 2021
2021 Giants 400 Report: Ranking the largest architecture, engineering, and construction firms in the U.S.
The 2021 Giants 400 Report includes more than 130 rankings across 25 building sectors and specialty categories.
Laboratories | Aug 30, 2021
Science in the sky: Designing high-rise research labs
Recognizing the inherent socioeconomic and environmental benefits of high-density design, research corporations have boldly embraced high-rise research labs.
Giants 400 | Aug 27, 2021
2021 Healthcare Sector Giants: Top architecture, engineering, and construction firms in the U.S. healthcare facilities sector
HDR, AECOM, Turner Construction, and Brasfield & Gorrie head BD+C's rankings of the nation's largest healthcare facilities sector architecture, engineering, and construction firms, as reported in the 2021 Giants 400 Report.
Giants 400 | Aug 27, 2021
2021 Office Sector Giants: Top architecture, engineering, and construction firms in the U.S. office building sector
Gensler, Jacobs, Turner Construction, and STO Building Group head BD+C's rankings of the nation's largest office building sector architecture, engineering, and construction firms, as reported in the 2021 Giants 400 Report.a