National nonresidential construction spending was down by 0.5% in June, 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 $829.4 billion for the month.
Spending was down on a monthly basis in eight of the 16 nonresidential subcategories. Both private and public nonresidential spending fell by 0.5% in June.
“There continues to be significant downward pressure on nonresidential construction spending volumes, and that is likely to intensify going forward,” said ABC Chief Economist Anirban Basu. “To date, construction spending measured in dollars has been propped up by elevated construction delivery costs, including higher materials prices and rapidly rising wages. Despite those inflationary pressures, aggregate nonresidential construction spending has failed to recover to pre-pandemic levels in nominal terms. The situation looks even worse when adjusting for inflation.
“The primary issue is that those high construction delivery charges are inducing a significant fraction of project owners to reconsider start dates,” said Basu. “True, backlog remains elevated, according to ABC’s Construction Backlog Indicator, but this may be because it is taking longer to complete projects. Additional project delays and cancellations are likely as borrowing costs continue to ratchet higher for those who purchase construction services and as the risk of recession increases. For now, many contractors remain busy and continue to operate at or near capacity. Whether that will continue for another 12 to 18 months remains an unanswered question.”
![Nonresidential Spending Growth](/sites/default/files/inline-images/Nonres%20spending%20growth.jpeg)
![June total nonres construction spending](/sites/default/files/inline-images/June%20total%20nonres%20construction%20spending.jpeg)
Related Stories
Market Data | Jul 17, 2020
7 must reads for the AEC industry today: July 17, 2020
Kennedy Middle School's new Administration/Family Center and Tips to make optimal use of salvaged materials.
Market Data | Jul 16, 2020
Final NEPA rule will make it easier to rebuild infrastructure, reinvigorate the economy, and continue protecting the environment
Administration’s final reforms to the federal environmental review process fix problems with prior process, maintain environmental rigor, and accelerate needed infrastructure improvements.
Market Data | Jul 16, 2020
5 must reads for the AEC industry today: July 16, 2020
1928 hotel reimagined as a new resiential and cultural hub and Walgreens plans hundreds of doctor's offices at its stores.
Market Data | Jul 10, 2020
5 must reads for the AEC industry today: July 10, 2020
The world's tallest hybrid timber tower and the Florida Gators have a new $65 million ballpark.
Market Data | Jul 9, 2020
6 must reads for the AEC industry today: July 9, 2020
The world's most sustainable furniture factory and what will construction look like when COVID-19 ends?
Market Data | Jul 8, 2020
North America’s construction output to fall by 6.5% in 2020, says GlobalData
Even though all construction activities have been allowed to continue in most parts of the US and Canada since the start of the COVID-19 pandemic, many projects in the bidding or final planning stages have been delayed or canceled.
Market Data | Jul 8, 2020
5 must reads for the AEC industry today: July 8, 2020
AEMSEN develops concept for sustainable urban living and nonresidential construction has recovered 56% of jobs lost since March.
Market Data | Jul 7, 2020
Nonresidential construction has recovered 56% of jobs lost since March employment report
Nonresidential construction employment added 74,700 jobs on net in June.
Market Data | Jul 7, 2020
7 must reads for the AEC industry today: July 7, 2020
Construction industry adds 158,000 workers in June and mall owners open micro distribution hubs for e-commerce fulfillment.
Market Data | Jul 6, 2020
Nonresidential construction spending falls modestly in May
Private nonresidential spending declined 2.4% in May and public nonresidential construction spending increased 1.2%.