Nonresidential construction spending remained unchanged in April on a monthly basis, according to an Associated Builders and Contractors (ABC) analysis of U.S. Census Bureau data released today. However, year-over-year spending was up a sturdy 6.1%.
Private sector spending increased 0.8% on a monthly basis and is up 5.3% from a year ago. Public sector spending fell 1.4% in April, but is up 7.3% year over year.
“Between today’s employment and construction spending reports, it is clear that the economy continues to exhibit strong momentum and abundant confidence,” said ABC Chief Economist Anirban Basu. “It’s important to remember that the construction spending data generally have failed to display as much economic strength as many other indicators. Even the most recent monthly readings on construction spending were unspectacular, but the year-over-year numbers are consistent with ongoing economic and industry progress.
“Perhaps most encouraging is the growing strength of the public categories,” said Basu. “For many years, public construction spending languished even as private categories demonstrated growing vigor. With the dramatic improvement in state and local government finances in many communities in recent years, there is greater capacity to invest in infrastructure. Not coincidentally, construction spending in the transportation category rose 22% during the past year. Spending in the public safety category, which includes spending on police and fire stations, is up by nearly 17%.
“As always, there is a need to pay attention to any clouds forming on the horizon,” said Basu. “Inflationary pressures continue to build, with tariffs on steel and aluminum likely to accelerate construction materials price appreciation during the next several months. Interest rates are expected to head higher, though perhaps only in fits and starts. Wage pressures also continue to build. The implication is that the cost of financing construction projects is on the rise. Should those costs rise too quickly, the momentum presently observable in nonresidential construction spending and employment data could quickly dissipate.”
Related Stories
Market Data | May 4, 2020
The Los Angeles market continue to lead the U.S. hotel construction pipeline at the close of the first quarter of 2020
Nationally, under construction project counts hit a new all-time high with 1,819 projects with 243,100 rooms.
Market Data | May 1, 2020
Nonresidential construction spending declines in March as pandemic halts projects
Group warns loan threats are hurting relief program.
Market Data | May 1, 2020
6 must reads for the AEC industry today: May 1, 2020
DLR Group completes LA Memorial Coliseum renovation and over 50% of department stores in malls predicted to close by 2021.
Market Data | Apr 30, 2020
5 must reads for the AEC industry today: April 30, 2020
College programs help prepare students for careers in the construction industry and a national movement to cancel May rent takes shape.
Market Data | Apr 30, 2020
The U.S. Hotel Construction pipeline continued to expand year-over-year despite COVID-19 in the first quarter of 2020
Many open or temporarily closed hotels have already begun or are in the planning stages of renovating and repositioning their assets while occupancy is low or non-existent.
Market Data | Apr 29, 2020
5 must reads for the AEC industry today: April 29, 2020
A new Human performance Center and Construction employment declines in 99 metro areas.
Market Data | Apr 29, 2020
Construction employment declines in 99 metro areas in March from 2019
Industry officials call for new state and federal funding to add jobs.
Market Data | Apr 28, 2020
5 must reads for the AEC industry today: April 28, 2020
A virtual 'city-forest' to help solve population density challenges and planning for life in cities after the pandemic.
Market Data | Apr 27, 2020
5 must reads for the AEC industry today: April 27, 2020
Colleges begin building campus eSports arenas and PCL Construction rolls out portable coronavirus testing centers.
Market Data | Apr 24, 2020
6 must reads for the AEC industry today: April 24, 2020
Take a virtual tour of Frank Lloyd Wright's Robie House and Construction Contractor Confidence plummets.