National nonresidential construction spending increased by 1.6% in January and is up 5.1% on a year-ago basis, 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 a record $806.9 billion in January.
Private nonresidential spending rose 0.8% on a monthly basis and is up 0.5% compared to the same time last year. Public nonresidential construction spending also increased, rising 2.6% for the month and 12.3% on a year over year basis.
“Despite all the focus on the dislocating impacts of the coronavirus, construction—a key element of the U.S. economy—continues to perform,” said ABC Chief Economist Anirban Basu. “For the first time in history, the volume of nonresidential construction spending exceeded $800 billion on an annualized basis and now stands at an all-time high. Both public and private nonresidential construction spending expanded to start 2020, a reflection of the broader economic momentum evident over the last several years. Backlog remains healthy, according to the ABC Construction Backlog Indicator, and with the nation continuing to add jobs, there is more demand for public and private construction and additional funding resources. This is especially apparent in several infrastructure categories, in which spending growth continues to be robust due to healthier state and local government finances.
“That said, there is no question that the coronavirus has significantly compromised both global and national economic momentum over the past two to three weeks,” said Basu. “U.S. manufacturing and shipping segments have begun to soften, with significant reductions in container volume already being reported at several major U.S. ports. While the crisis is expansive enough to potentially drive the economy into recession, the question is whether the crisis is severe enough to countervail current U.S. economic momentum.
“At this time, it is unclear how coronavirus will affect materials prices,” said Basu. “Certain construction components, whether from China or elsewhere, may experience inadequate supply during the weeks ahead, and the more general impact will be decreased input prices due to lower demand. This is likely to be the case for a number of key commodities, including those related to energy.”
Related Stories
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.
Market Data | Apr 23, 2020
Construction Contractor Confidence plummets in February
As of February 2020, fewer than 30% of contractors expected their sales to increase over the next six months.
Market Data | Apr 23, 2020
5 must reads for the AEC industry today: April 23, 2020
The death of the department store and how to return to work when the time comes.
Market Data | Apr 22, 2020
6 must reads for the AEC industry today: April 22, 2020
Repurposed containers can be used as rapid response airborne infection isolation rooms and virtual site visits help control infection on project sites.
Market Data | Apr 21, 2020
ABC's Construction Backlog Indicator down in February
Backlog for firms working in the infrastructure segment rose by 1.3 months in February while backlog for commercial and institutional and heavy industrial firms declined by 0.6 months and 0.7 months, respectively.