According to an Associated Builders and Contractors analysis of U.S. Census Bureau data released today, national nonresidential construction spending rose 0.3% in April, totaling $792.6 billion on a seasonally adjusted annualized basis, which is a 6.4% increase compared to the same time last year. While public nonresidential spending expanded 4.8% on a monthly basis and increased 15.4% since April 2018, private nonresidential spending fell 2.9% in April and is up just 0.6 % year-over-year.
Among the 16 nonresidential construction spending categories, nine experienced an increase in monthly spending, with the largest increases registered in water supply (9.8%), highway and street (6.8%) and transportation (3.9%). Manufacturing (-7.1%) and commercial (-3.7%) experienced the largest decreases in April, though manufacturing spending is still up 10.9% compared to the same time last year.
“Today’s data release shows that nonresidential construction spending remains vigorous in America,” said ABC Chief Economist Anirban Basu. “While April’s monthly nonresidential construction spending growth of 0.3 percent appears lackluster, this was largely the result of a sizeable upward revision to March construction spending figures.
“Today’s data release also indicates that the baton has now been fully passed,” said Basu. “Earlier in the recovery, nonresidential construction spending growth was primarily driven by private segments. Low interest rates and abundant liquidity helped fuel private investment in hotels, data centers, casinos, fulfillment centers and other forms of private construction. But over the past year, private nonresidential construction spending has barely budged. Meanwhile, public residential spending is up 15.4 percent and April’s spending growth was led by water supply and highway/street.
“Given current levels of backlog, which expanded to 9.5 months in March 2019, nonresidential construction spending should remain elevated,” said Basu. “That said, risks of recession in 2020 are rapidly rising, which has the potential to reduce construction activity in 2021 and/or 2022.”
Related Stories
Industry Research | May 4, 2017
How your AEC firm can go from the shortlist to winning new business
Here are four key lessons to help you close more business.
Engineers | May 3, 2017
At first buoyed by Trump election, U.S. engineers now less optimistic about markets, new survey shows
The first quarter 2017 (Q1/17) of ACEC’s Engineering Business Index (EBI) dipped slightly (0.5 points) to 66.0.
Market Data | May 2, 2017
Nonresidential Spending loses steam after strong start to year
Spending in the segment totaled $708.6 billion on a seasonally adjusted, annualized basis.
Market Data | May 1, 2017
Nonresidential Fixed Investment surges despite sluggish economic in first quarter
Real gross domestic product (GDP) expanded 0.7 percent on a seasonally adjusted annualized rate during the first three months of the year.
Industry Research | Apr 28, 2017
A/E Industry lacks planning, but still spending large on hiring
The average 200-person A/E Firm is spending $200,000 on hiring, and not budgeting at all.
Market Data | Apr 19, 2017
Architecture Billings Index continues to strengthen
Balanced growth results in billings gains in all regions.
Market Data | Apr 13, 2017
2016’s top 10 states for commercial development
Three new states creep into the top 10 while first and second place remain unchanged.
Market Data | Apr 6, 2017
Architecture marketing: 5 tools to measure success
We’ve identified five architecture marketing tools that will help your firm evaluate if it’s on the track to more leads, higher growth, and broader brand visibility.
Market Data | Apr 3, 2017
Public nonresidential construction spending rebounds; overall spending unchanged in February
The segment totaled $701.9 billion on a seasonally adjusted annualized rate for the month, marking the seventh consecutive month in which nonresidential spending sat above the $700 billion threshold.
Market Data | Mar 29, 2017
Contractor confidence ends 2016 down but still in positive territory
Although all three diffusion indices in the survey fell by more than five points they remain well above the threshold of 50, which signals that construction activity will continue to be one of the few significant drivers of economic growth.