National nonresidential construction spending declined 1.1% in March, 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 $778.5 billion for the month.
Spending was down on a monthly basis in 11 of the 16 nonresidential subcategories. Private nonresidential spending was down 0.9%, while public nonresidential construction spending fell 1.5% in March.
“While the longer-term outlook for nonresidential construction is superb, the pandemic is lingering, creating much damage to commercial real estate fundamentals,” said ABC Chief Economist Anirban Basu. “The lodging, office and commercial segments experienced declines in spending in March. Office vacancy rates are elevated in many markets, and the industry experienced negative net absorption. The trials and tribulations of hotel operators, retailers and restauranteurs are also well known. Private nonresidential construction spending is down more than 9% from March 2020.
“Public construction spending was weak in March and is down more than 5% on a year-over-year basis,” said Basu. “While large-scale federal infrastructure outlays are likely in the future, that money has yet to arrive. State and local government finances have generally held up far better than many had predicted earlier in the COVID-19 crisis, but many governments have had to spend significant operational sums to countervail the public health crisis and therefore had to redirect money away from infrastructure.
“ABC’s Construction Backlog Indicator has foreshadowed this state of affairs for months,” said Basu. “The most recent readings suggest that the construction spending recovery will be slow over the near-term. However, as the broader economic recovery picks up additional speed later this year with more pervasive vaccinations and re-openings, both private and public construction spending should begin to manifest more positive momentum later this year and into 2022.”
Related Stories
Market Data | Dec 13, 2016
ABC predicts modest growth for 2017 nonresidential construction sector; warns of vulnerability for contractor
“The U.S. economy continues to expand amid a weak global economy and, despite risks to the construction industry, nonresidential spending should expand 3.5 percent in 2017,” says ABC Chief Economist Anirban Basu.
Market Data | Dec 2, 2016
Nonresidential construction spending gains momentum
Nonresidential spending is now 2.6 percent higher than at the same time one year ago.
Market Data | Nov 30, 2016
Marcum Commercial Construction Index reports industry outlook has shifted; more change expected
Overall nonresidential construction spending in September totaled $690.5 billion, down a slight 0.7 percent from a year earlier.
Industry Research | Nov 30, 2016
Multifamily millennials: Here is what millennial renters want in 2017
It’s all about technology and convenience when it comes to the things millennial renters value most in a multifamily facility.
Market Data | Nov 29, 2016
It’s not just traditional infrastructure that requires investment
A national survey finds strong support for essential community buildings.
Industry Research | Nov 28, 2016
Building America: The Merit Shop Scorecard
ABC releases state rankings on policies affecting construction industry.
Multifamily Housing | Nov 28, 2016
Axiometrics predicts apartment deliveries will peak by mid 2017
New York is projected to lead the nation next year, thanks to construction delays in 2016
Market Data | Nov 22, 2016
Construction activity will slow next year: JLL
Risk, labor, and technology are impacting what gets built.
Market Data | Nov 17, 2016
Architecture Billings Index rebounds after two down months
Decline in new design contracts suggests volatility in design activity to persist.
Market Data | Nov 11, 2016
Brand marketing: Why the B2B world needs to embrace consumers
The relevance of brand recognition has always been debatable in the B2B universe. With notable exceptions like BASF, few manufacturers or industry groups see value in generating top-of-mind awareness for their products and services with consumers.
