Nonresidential construction spending fell 0.1% on a monthly basis in January 2018, while year-over-year spending increased, according to an Associated Builders and Contractors (ABC) analysis of U.S. Census Bureau data released March 1. Nonresidential January spending totaled $732.9 billion on a seasonally adjusted annual rate, adding up to a 2.4% increase year over year.
Private nonresidential construction fell 1.5% for the month, while public sector nonresidential spending increased 1.9%. The largest year-over-year increases occurred in public safety (33.5%) and transportation (20.2%).
“Today’s data indicates that nonresidential spending continues to expand erratically and unevenly,” said ABC’s Chief Economist Anirban Basu. “On a monthly basis, nonresidential construction spending declined in January. While the decline was minimal, and may have been primarily attributable to freezing temperatures in much of the country, there has been a long-lived pattern of occasional spending setbacks in the context of broader expansion cycles. The result of the most recent spending setback is that nonresidential construction outlays are only 2.4% above year-ago levels.
“Interestingly, there is evidence of a reversal of fortune as spending picks up in certain public segments while flattening out in certain private ones,” said Basu. “With the housing market recovering, property tax and other forms of real estate tax collections have increased. This has positioned a growing number of public agencies to step up construction spending in education, public safety and other publicly financed categories.
“Meanwhile, there are growing concerns regarding excess inventory of commercial and office space in certain metropolitan areas,” said Basu. “This may help explain recent construction spending setbacks in a variety of privately financed construction segments. That said, there is little reason to believe that private construction will falter in 2018. Economic growth, including job growth, remains robust. Confidence is surging among many economic actors, including bankers and developers. The combination of capital and confidence should be enough to drive spending growth in most private segments as 2018 progresses.”
Related Stories
Market Data | Jan 27, 2022
Dallas leads as the top market by project count in the U.S. hotel construction pipeline at year-end 2021
The market with the greatest number of projects already in the ground, at the end of the fourth quarter, is New York with 90 projects/14,513 rooms.
Market Data | Jan 26, 2022
2022 construction forecast: Healthcare, retail, industrial sectors to lead ‘healthy rebound’ for nonresidential construction
A panel of construction industry economists forecasts 5.4 percent growth for the nonresidential building sector in 2022, and a 6.1 percent bump in 2023.
Market Data | Jan 24, 2022
U.S. hotel construction pipeline stands at 4,814 projects/581,953 rooms at year-end 2021
Projects scheduled to start construction in the next 12 months stand at 1,821 projects/210,890 rooms at the end of the fourth quarter.
Market Data | Jan 19, 2022
Architecture firms end 2021 on a strong note
December’s Architectural Billings Index (ABI) score of 52.0 was an increase from 51.0 in November.
Market Data | Jan 13, 2022
Materials prices soar 20% in 2021 despite moderating in December
Most contractors in association survey list costs as top concern in 2022.
Market Data | Jan 12, 2022
Construction firms forsee growing demand for most types of projects
Seventy-four percent of firms plan to hire in 2022 despite supply-chain and labor challenges.
Market Data | Jan 7, 2022
Construction adds 22,000 jobs in December
Jobless rate falls to 5% as ongoing nonresidential recovery offsets rare dip in residential total.
Market Data | Jan 6, 2022
Inflation tempers optimism about construction in North America
Rider Levett Bucknall’s latest report cites labor shortages and supply chain snags among causes for cost increases.
Market Data | Jan 6, 2022
A new survey offers a snapshot of New York’s construction market
Anchin’s poll of 20 AEC clients finds a “growing optimism,” but also multiple pressure points.
Market Data | Jan 3, 2022
Construction spending in November increases from October and year ago
Construction spending in November totaled $1.63 trillion at a seasonally adjusted annual rate.