August marked the seventh consecutive month nonresidential construction spending expanded according to an Oct. 1 release supplied by the U.S. Census Bureau. Nonresidential spending totaled $696.3 billion on a seasonally adjusted, annualized basis in August, a 0.3% increase from the previous month and a 12.3% increase from the same time last year. The Census Bureau downwardly revised July's estimate from $696.1 billion to $694.1 billion.
"Job growth is fueling both consumer spending and the absorption of space, all of this is good for construction spending," said Associated Builders and Contractors Chief Economist Anirban Basu. "While construction spending has expanded by more than 12% over the past year, that is not to suggest that macroeconomic risks do not abound. Interest rates are likely to head higher going forward and there is no guarantee that energy prices will remain subdued. While low energy prices have caused some regional economies to slow, investment and spending has been bolstered in others.
"Recently, much attention has been focused on the global economic slowdown and the volatility of financial markets," said Basu. "The Federal Reserve's recent decision not to increase interest rates supported a developing narrative which suggests that the weakness now apparent in much of the world will eventually bring the U.S. into another recession."
Eight of 16 nonresidential construction sectors experienced spending increases in August on a monthly basis:
- Lodging-related construction spending expanded 2.8% on a monthly basis and 41.4% on a year–over-year basis
- Health care-related construction spending grew 1.9% on a monthly basis and 9.1% on a yearly basis
- Public safety-related construction spending expanded 0.4% in August and is 0.2% higher than last year
- Spending in the amusement and recreation category grew 1.3% for the month and 34.7% from the same time last year
- Transportation-related construction spending grew 1.4% in August and is up 12.1% from the same time last year
- Communication-related construction spending is up 0.4% for the month and 11.5% on a yearly basis
- Power-related construction spending expanded 1.2% month-over month but is down 6.7% year-over-year
- Manufacturing-related construction spending expanded 1.3% on a monthly basis and 57.6% on a yearly basis
Spending in half of the nonresidential construction subsectors fell in August on a monthly basis:
- Highway and street-related construction spending fell by 0.6% in August but is up 7% from the same time last year
- Sewage and waste disposal-related construction spending is 0.3% lower from July 2015 but 9% higher than in August 2014
- Water supply-related construction spending is down 0.2% for the month but is up 4.9% over the past 12 months
- Conservation and development-related construction spending fell 0.9% for the month but is up 12.7% from the same time last year
- Office-related construction spending dipped 0.2% lower in August but is up 25.4% since the same time last year
- Spending in the commercial category fell 1.2% for the month but grew 1.3% over the past 12 months
- Educational-related construction spending inched 0.6% lower for the month but is up 5.0% year-over-year
- Religious-related construction spending fell 9.4% for the month and 4.6% from August 2014
To view the previous spending report, click here.
Related Stories
| Jul 29, 2016
AIRPORT FACILITIES GIANTS: Airports binge on construction during busy year for travel
Terminal construction will grow by nearly $1 billion this year, and it will keep increasing. Airports are expanding and modernizing their facilities to keep passengers moving.
| Jul 29, 2016
Top 45 Airport Terminal Construction and CM Firms
Hensel Phelps generated more than $660 million in revenue last year to earn the top spot on BD+C’s annual ranking of the nation’s largest airport terminal construction and CM firms.
| Jul 27, 2016
Turner turns to design-build, P3, Lean practices, and engineering services
Design-build has accounted for a notable portion of Turner’s work over the last few years.
| Jul 27, 2016
CONSTRUCTION GIANTS: Economists forecast moderation for nonresidential projects
Construction spending is up this year and is expected to continue to increase through 2017. But, economists identified factors that could slow construction spending.
| Jul 27, 2016
Top 70 Construction Management Firms
Hill International, Jacobs, and JLL head Building Design+Construction's 2016 ranking of the largest construction management and project management firms in the United States.
| Jul 27, 2016
Top 115 Contractor Firms
Turner Construction, Whiting-Turner Contracting, Fluor, and Skanska top Building Design+Construction's 2016 ranking of the largest contractors in the United States.
Sports and Recreational Facilities | Jul 20, 2016
San Diego’s waterfront redevelopment would go beyond a mere ‘project’
Its developers envision a thriving business, education, and entertainment district, highlighted by a huge observation tower and aquarium.
| Jul 19, 2016
2016 GIANTS 300 REPORT: Ranking the nation's largest architecture, engineering, and construction firms
Now in its 40th year, BD+C’s annual Giants 300 report ranks AEC firms by discipline and across more than 20 building sectors and specialty services.
Sports and Recreational Facilities | Jul 18, 2016
Turner and AECOM will build the Los Angeles Rams’ new multi-billion dollar stadium project
The 70,000-seat stadium will be ready by the 2019 NFL season. The surrounding mixed-use development includes space for retail, hotels, and public parks.
Contractors | Jul 15, 2016
Trade unions, contractors call for maximum penalty in construction worker death case
‘Sick and tired’ of lawbreaking contractors defining public perception.