National nonresidential construction spending declined 0.2% in June, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.21 trillion. Nonresidential construction has expanded 5.3% from a year ago.
Spending was down on a monthly basis in 7 of 16 nonresidential subcategories. Private nonresidential spending fell 0.1%, while public nonresidential construction spending was down 0.4% in June.
“A new trend in nonresidential construction is emerging, and it’s not a good thing,” said ABC Chief Economist Anirban Basu. “Despite a bevy of megaprojects in certain parts of the nation, overall nonresidential construction spending appears to have entered a period of stagnation. The flattening of momentum has been apparent for the better part of a year, but the impact of higher interest rates, tighter credit conditions and a softening economy is increasingly apparent in the most recent data, which indicate that aggregate nonresidential construction spending is in decline.
“Despite a recent loss in spending growth momentum, many contractors remain upbeat, according to ABC’s Construction Confidence Index, anticipating growth in revenues and payrolls over the next six months,” said Basu. “But with interest rates staying higher for longer, it appears that many projects are being put on hold, limiting construction starts, suppressing backlog and perhaps eventually eroding current contractor confidence.”
Related Stories
Contractors | Nov 24, 2015
FMI survey: Millennials in construction get a bad rap, tend to be loyal, hard-working
While the stigma exists that Millennials are entitled, disloyal, and lazy, it appears that this is not true, according to a new report from FMI.
Contractors | Nov 12, 2015
Construction will outpace worldwide GDP growth over the next 15 years
Three countries—the United States, China, and India—will account for nearly three-fifths of worldwide construction growth over the next 15 years, according to a new report from Global Construction Perspectives and Oxford Economics.
Contractors | Nov 5, 2015
Budget bill provision raises OSHA fines for first time in 25 years
Inflation-adjusted penalty hikes could go up as much as 80%.
Contractors | Nov 3, 2015
ABC, AIA & NAHB: Residential, nonresidential construction growth expected in 2016
Economists from the three trade associations discussed several indicators for sector performance in a joint web conference.
Contractors | Nov 2, 2015
ABC: September's nonresidential spending slip no cause for concern
Despite the monthly drop, September's year-over-year increase is largest in seven years. Seven of 16 nonresidential construction sectors saw spending increases.
Contractors | Oct 30, 2015
ABC: Economic growth stronger than headline GDP figure suggests
GDP expanded 1.5% during the third quarter while nonresidential fixed investment expanded by 2.1% during that period.
BIM and Information Technology | Oct 29, 2015
MIT develops ‘river of 3D pixels’ to assemble objects
The Kinetic Blocks can manipulate objects into shapes without human interference.
Contractors | Oct 28, 2015
Office construction costs highest in New York City, San Francisco, says CBRE
A CBRE report found that New York’s construction costs are more than $500 per sf. San Francisco isn’t too far behind.
Contractors | Oct 16, 2015
ABC report: Confidence rises during the first half of the year
In the first half, sales expectations and profit margin expectations rose while staffing level intentions dipped slightly.
Contractors | Oct 7, 2015
Construction equipment continues to be vulnerable to theft
Poor security and lax inventory control make jobsites sitting ducks for robbers, according to crime-data analysis by LoJack.
