National nonresidential construction spending declined 1.3% in February, 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 $789.5 billion for the month.
On a monthly basis, spending was down in 13 of 16 nonresidential subcategories. Private nonresidential spending was down 1.0%, while public nonresidential construction spending fell 1.8% in February. Nonresidential construction spending has declined by 6.1% from the same time last year.
“We remain in the midst of the COVID-19 pandemic, which has shattered commercial real estate fundamentals,” said ABC Chief Economist Anirban Basu. “This too shall pass, but there continues to be downward pressure on nonresidential construction activity, and that was apparent in February, when weakness in spending was apparent in private and public segments alike.
“But past is not prologue in this instance,” said Basu. “America is about to experience a massive resurgence in economic growth as vaccinations proceed. Many ABC members report that backlog has already been climbing as projects that had been postponed earlier in the crisis come back to life. While some residual weakness may persist in the next few months, nonresidential construction spending is poised to stabilize during the summer and enter 2022 with substantial momentum, though some private construction segments will continue to lag.
“Consequently, the nature of the challenges facing contractors will shift dramatically during the months ahead,” said Basu. “While many contractors have indicated that demand for construction services has been among their leading sources of concern during the pandemic, by the end of this year, the greatest challenge for many will be securing a sufficient workforce with which to compete for and complete projects. This will likely be even more of an issue in 2022 and 2023 as the pace of economic recovery progresses.”
Related Stories
Market Data | Feb 20, 2020
U.S. multifamily market gains despite seasonal lull
The economy’s steady growth buoys prospects for continued strong performance.
Market Data | Feb 19, 2020
Architecture billings continue growth into 2020
Demand for design services increases across all building sectors.
Market Data | Feb 5, 2020
Construction employment increases in 211 out of 358 metro areas from December 2018 to 2019
Dallas-Plano-Irving, Texas and Kansas City have largest gains; New York City and Fairbanks, Alaska lag the most as labor shortages likely kept firms in many areas from adding even more workers.
Market Data | Feb 4, 2020
Construction spending dips in December as nonresidential losses offset housing pickup
Homebuilding strengthens but infrastructure and other nonresidential spending fades in recent months, reversing pattern in early 2019.
Market Data | Feb 4, 2020
IMEG Corp. acquires Clark Engineering
Founded in 1938 in Minneapolis, Clark Engineering has an extensive history of public and private project experience.
Market Data | Jan 30, 2020
U.S. economy expands 2.1% in 4th quarter
Investment in structures contracts.
Market Data | Jan 30, 2020
US construction & real estate industry sees a drop of 30.4% in deal activity in December 2019
A total of 48 deals worth $505.11m were announced in December 2019.
Market Data | Jan 29, 2020
Navigant research report finds global wind capacity value is expected to increase tenfold over the next decade
Wind power is being developed in more countries as well as offshore and onshore.
Market Data | Jan 28, 2020
What eight leading economists predict for nonresidential construction in 2020 and 2021
Public safety, education, and healthcare highlight a market that is entering growth-slowdown mode, but no downturn is projected, according to AIA's latest Consensus Construction Forecast panel.
Market Data | Jan 28, 2020
Los Angeles has the largest hotel construction pipeline in the United States
Los Angeles will have a growth rate of 2.5% with 19 new hotels/2,589 rooms opening.
