National nonresidential construction spending fell 0.1% in August, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, spending totaled $814.3 billion for the month.
Of the 16 nonresidential subcategories, nine were down on a monthly basis. Private nonresidential spending decreased 0.3% from July, while public nonresidential construction spending was up 0.2%. Nonresidential construction spending is down 0.7% compared to August 2019.
“While overall construction spending rose significantly in August, much of that was attributed to surging single-family housing starts,” said ABC Chief Economic Anirban Basu. “The picture is very different in a number of nonresidential construction categories, especially in segments that have been disproportionately impacted by the pandemic, such as lodging and office, which are down 12.1% and nearly 9% year over year, respectively.
“The good news is that nonresidential construction spending momentum remains apparent in a number of public segments,” said Basu. “On a monthly basis, construction spending was up in the water supply, highway/street and educational categories. Spending in the public safety segment is up nearly 40% compared to the same time last year.
“Absent an infrastructure-oriented stimulus package, the likely trajectory of nonresidential construction spending does not appear especially bright,” said Basu. “Commercial real estate fundamentals are poor, with elevated vacancy rates and tighter lending conditions, rendering it probable that private nonresidential construction spending will continue to dip. State and local finances have been pummeled by the pandemic, resulting in less support for the next generation of public projects. Many contractors report declining backlog, according to ABC’s Construction Backlog Indicator, and fewer opportunities to bid on new projects. With winter coming and infection rates poised to rise, the quarters to come are shaping up to be challenging ones.”
Related Stories
Market Data | May 7, 2021
Construction employment stalls in April
Soaring costs, supply-chain challenges, and workforce shortages undermine industry's recovery.
Market Data | May 4, 2021
Nonresidential construction outlays drop in March for fourth-straight month
Weak demand, supply-chain woes make further declines likely.
Market Data | May 3, 2021
Nonresidential construction spending decreases 1.1% in March
Spending was down on a monthly basis in 11 of the 16 nonresidential subcategories.
Market Data | Apr 30, 2021
New York City market continues to lead the U.S. Construction Pipeline
New York City has the greatest number of projects under construction with 110 projects/19,457 rooms.
Market Data | Apr 29, 2021
U.S. Hotel Construction pipeline beings 2021 with 4,967 projects/622,218 rooms at Q1 close
Although hotel development may still be tepid in Q1, continued government support and the extension of programs has aided many businesses to get back on their feet as more and more are working to re-staff and re-open.
Market Data | Apr 28, 2021
Construction employment declines in 203 metro areas from March 2020 to March 2021
The decline occurs despite homebuilding boom and improving economy.
Market Data | Apr 20, 2021
The pandemic moves subs and vendors closer to technology
Consigli’s latest market outlook identifies building products that are high risk for future price increases.
Market Data | Apr 20, 2021
Demand for design services continues to rapidly escalate
AIA’s ABI score for March rose to 55.6 compared to 53.3 in February.
Market Data | Apr 16, 2021
Construction employment in March trails March 2020 mark in 35 states
Nonresidential projects lag despite hot homebuilding market.
Market Data | Apr 13, 2021
ABC’s Construction Backlog slips in March; Contractor optimism continues to improve
The Construction Backlog Indicator fell to 7.8 months in March.