National nonresidential construction spending fell 1.6% in September, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, monthly spending totaled $794.3 billion.
Among the sixteen nonresidential subcategories, thirteen were down on a monthly basis. Private nonresidential spending declined 1.5% in September, while public nonresidential construction spending was down 1.7%.
“The pace is of decline in nonresidential construction spending is accelerating,” said ABC Chief Economist Anirban Basu. “This is precisely what had been predicted. Coming into the crisis, the economy was rolling, helping to lift construction backlog amid elevated developer confidence, according to ABC’s Construction Backlog Indicator and Construction Confidence Index. The crisis shattered that equilibrium, producing distressed commercial real estate fundamentals, diminished confidence, postponed and cancelled projects, the embrace of remote work, tighter credit conditions and damaged state and local government finances.
“Though the initial phase of economic recovery has been brisk, economic outcomes are likely to deteriorate markedly during the months ahead absent further stimulus,” said Basu. “That would further delay nonresidential construction’s eventual recovery. Nonresidential construction spending is down 4.4% from the same time last year, with lodging-related spending down more than 15% and office-related spending down nearly 7%. These are among the segments hardest hit by social distancing directives, and another round of shutdowns would further exacerbate declines in these and other segments.
“The hope is that policymakers in Washington, D.C., will soon see fit to deliver on a long-awaited infrastructure financing and spending program,” said Basu. “Not only would that accelerate the broader economy’s economic recovery, a well-executed infrastructure package would make American workers more productive, unleash new private development opportunities and allow America to better compete in the global marketplace. The longer America has to wait for such a package, however, the more vulnerable its citizens will be to further economic dislocations.”
Related Stories
Market Data | Sep 7, 2021
Construction sheds 3,000 jobs in August
Gains are limited to homebuilding as other contractors struggle to fill both craft and salaried positions.
Market Data | Sep 3, 2021
Construction workforce shortages reach pre-pandemic levels
Coronavirus continues to impact projects and disrupt supply chains.
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.
Market Data | Sep 1, 2021
Construction spending posts small increase in July
Coronavirus, soaring costs, and supply disruptions threaten to erase further gains.
Market Data | Sep 1, 2021
Bradley Corp. survey finds office workers taking coronavirus precautions
Due to the rise in new strains of the virus, 70% of office workers have implemented a more rigorous handwashing regimen versus 59% of the general population.
Market Data | Aug 31, 2021
Three out of four metro areas add construction jobs from July 2020 to July 2021
COVID, rising costs, and supply chain woes may stall gains.
Market Data | Aug 24, 2021
July construction employment lags pre-pandemic peak in 36 states
Delta variant of coronavirus threatens to hold down further gains.
Market Data | Aug 17, 2021
Demand for design activity continues to expand
The ABI score for July was 54.6.
Market Data | Aug 12, 2021
Steep rise in producer prices for construction materials and services continues in July.
The producer price index for new nonresidential construction rose 4.4% over the past 12 months.
Market Data | Aug 6, 2021
Construction industry adds 11,000 jobs in July
Nonresidential sector trails overall recovery.