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 | Sep 17, 2020
6 must reads for the AEC industry today: September 17, 2020
Foster + Partners-designed hospital begins construction in Cairo and heat pumps are the future for hot water.
Market Data | Sep 16, 2020
6 must reads for the AEC industry today: September 16, 2020
REI sells unused HQ building and Adjaye Associates will design The Africa Institute.
Market Data | Sep 15, 2020
7 must reads for the AEC industry today: September 15, 2020
Energy efficiency considerations for operating buildings during a pandemic and is there really a glass box paradox?
Market Data | Sep 14, 2020
6 must reads for the AEC industry today: September 14, 2020
63% of New York's restaurants could be gone by 2021 and new weapons in the apartment amenities arms race.
Market Data | Sep 11, 2020
5 must reads for the AEC industry today: September 11, 2020
Des Moines University begins construction on new campus and the role of urgent care in easing the oncology journey.
Market Data | Sep 10, 2020
6 must reads for the AEC industry today: September 10, 2020
Taipei's new Performance Hall and Burger King's touchless restaurant designs.
Market Data | Sep 9, 2020
6 must reads for the AEC industry today: September 9, 2020
What will the 'new normal' look like and the AIA hands out its Twenty-five Year Award.
Market Data | Sep 8, 2020
‘New normal’: IAQ, touchless, and higher energy bills?
Not since 9/11 has a single event so severely rocked the foundation of the commercial building industry.
Market Data | Sep 8, 2020
7 must reads for the AEC industry today: September 8, 2020
Google proposes 40-acre redevelopment plan and office buildings should be an essential part of their communities.
Market Data | Sep 4, 2020
6 must reads for the AEC industry today: September 4, 2020
10 Design to redevelop Nanjing AIrport and TUrner Construction takes a stand against racism.