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 | Aug 4, 2020
7 must reads for the AEC industry today: August 4, 2020
Construction spending decreases for fourth consecutive month and 100% affordable housing development breaks ground in Mountain View.
Market Data | Aug 3, 2020
Construction spending decreases for fourth consecutive month in June
Association officials warn further contraction is likely unless federal government enacts prompt, major investment in infrastructure as state and local governments face deficits.
Market Data | Aug 3, 2020
6 must reads for the AEC industry today: August 3, 2020
The future is a number game for retail and restaurants and 5 reasons universities are renovating student housing.
Market Data | Jul 31, 2020
5 must reads for the AEC industry today: July 31, 2020
Vegas's newest resort and casino is packed with contactless technology and Mariott, Hilton, and IHG dominate the U.S. hotel construction pipeline.
Market Data | Jul 30, 2020
Marriott, Hilton, and IHG continue to dominate the U.S. hotel construction pipeline at Q2’20 close
Hilton’s Home2 Suites and IHG’s Holiday Inn Express continue to be the most prominent brands in the U.S. pipeline.
Market Data | Jul 30, 2020
7 must reads for the AEC industry today: July 30, 2020
Millennium Tower finally has a fix and construction costs decrease for the first time in 10 years.
Market Data | Jul 29, 2020
62% of metros shed construction jobs from June 2019 to June 2020 as Association calls for new infrastructure funding, other relief steps
New York City and Brockton-Bridgewater-Easton, Mass. have worst 12-month losses, while Austin and Walla Walla, Wash. top job gainers.
Market Data | Jul 29, 2020
6 must reads for the AEC industry today: July 29, 2020
The world's first net-zero airport and California utility adopts climate emergency declaration.
Market Data | Jul 28, 2020
For the fourth consecutive quarter, Los Angeles leads the U.S. hotel construction pipeline at the close of Q2’ 20
New York City continues to have the greatest number of projects under construction, with 106 projects/18,354 rooms.
Market Data | Jul 28, 2020
6 must reads for the AEC industry today: July 28, 2020
St. Petersburg Pier reconstruction completes and post-pandemic workplace design will not be the same for all.