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
Contractors | Nov 24, 2015
FMI survey: Millennials in construction get a bad rap, tend to be loyal, hard-working
While the stigma exists that Millennials are entitled, disloyal, and lazy, it appears that this is not true, according to a new report from FMI.
Contractors | Nov 12, 2015
Construction will outpace worldwide GDP growth over the next 15 years
Three countries—the United States, China, and India—will account for nearly three-fifths of worldwide construction growth over the next 15 years, according to a new report from Global Construction Perspectives and Oxford Economics.
Contractors | Nov 5, 2015
Budget bill provision raises OSHA fines for first time in 25 years
Inflation-adjusted penalty hikes could go up as much as 80%.
Contractors | Nov 3, 2015
ABC, AIA & NAHB: Residential, nonresidential construction growth expected in 2016
Economists from the three trade associations discussed several indicators for sector performance in a joint web conference.
Contractors | Nov 2, 2015
ABC: September's nonresidential spending slip no cause for concern
Despite the monthly drop, September's year-over-year increase is largest in seven years. Seven of 16 nonresidential construction sectors saw spending increases.
Contractors | Oct 30, 2015
ABC: Economic growth stronger than headline GDP figure suggests
GDP expanded 1.5% during the third quarter while nonresidential fixed investment expanded by 2.1% during that period.
BIM and Information Technology | Oct 29, 2015
MIT develops ‘river of 3D pixels’ to assemble objects
The Kinetic Blocks can manipulate objects into shapes without human interference.
Contractors | Oct 28, 2015
Office construction costs highest in New York City, San Francisco, says CBRE
A CBRE report found that New York’s construction costs are more than $500 per sf. San Francisco isn’t too far behind.
Contractors | Oct 16, 2015
ABC report: Confidence rises during the first half of the year
In the first half, sales expectations and profit margin expectations rose while staffing level intentions dipped slightly.
Contractors | Oct 7, 2015
Construction equipment continues to be vulnerable to theft
Poor security and lax inventory control make jobsites sitting ducks for robbers, according to crime-data analysis by LoJack.
