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 | Jan 13, 2020
Construction employment increases by 20,000 in December and 151,000 in 2019
Survey finds optimism about 2020 along with even tighter labor supply as construction unemployment sets record December low.
Market Data | Jan 10, 2020
North America’s office market should enjoy continued expansion in 2020
Brokers and analysts at two major CRE firms observe that tenants are taking longer to make lease decisions.
Market Data | Dec 17, 2019
Architecture Billings Index continues to show modest growth
AIA’s Architecture Billings Index (ABI) score of 51.9 for November reflects an increase in design services provided by U.S. architecture firms.
Market Data | Dec 12, 2019
2019 sets new record for supertall building completion
Overall, the number of completed buildings of at least 200 meters in 2019 declined by 13.7%.
Market Data | Dec 4, 2019
Nonresidential construction spending falls in October
Private nonresidential spending fell 1.2% on a monthly basis and is down 4.3% from October 2018.
Market Data | Nov 25, 2019
Office construction lifts U.S. asking rental rate, but slowing absorption in Q3 raises concerns
12-month net absorption decelerates by one-third from 2018 total.
Market Data | Nov 22, 2019
Architecture Billings Index rebounds after two down months
The Architecture Billings Index (ABI) score in October is 52.0.
Market Data | Nov 14, 2019
Construction input prices unchanged in October
Nonresidential construction input prices fell 0.1% for the month and are down 2.0% compared to the same time last year.
Multifamily Housing | Nov 7, 2019
Multifamily construction market remains strong heading into 2020
Fewer than one in 10 AEC firms doing multifamily work reported a decrease in proposal activity in Q3 2019, according to a PSMJ report.
Market Data | Nov 5, 2019
Construction and real estate industry deals in September 2019 total $21.7bn globally
In terms of number of deals, the sector saw a drop of 4.4% over the last 12-month average.