National nonresidential construction spending grew 0.1% in July, according to an Associated Builders and Contractors analysis of data published by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.08 trillion and is up 16.5% year over year.
Spending was up on a monthly basis in 8 of the 16 nonresidential subcategories. Private nonresidential spending increased 0.5%, while public nonresidential construction spending was down 0.4% in July.
“After today’s jobs report, which indicated that nonresidential construction added an outsized number of jobs in August, one would have expected a strong construction spending growth number as well,” said ABC Chief Economist Anirban Basu. “Alas, the economic data, just like the economy, continue to be full of surprises. In July, nonresidential construction spending barely expanded. Once one adjusts for inflation, spending declined in real terms.
“Perhaps the bigger surprise is that construction spending weakness was not concentrated in the private developer-driven segments that have struggled to establish consistent momentum, but in a number of public construction segments,” said Basu. “Monthly spending was down in the highway/street, transportation, sewage/waste disposal and conservation/development categories. However, each of these categories has experienced year-over-year spending growth.
“Since nonresidential construction hiring was strong last month, the expectation is that July’s construction spending number will prove to be an aberration,” said Basu. “Spending growth should be solid going forward, driven in large measure by several massive construction projects in development or early construction stages. That said, those segments that depend most on bank financing are poised to weaken going forward.”
Related Stories
Market Data | Aug 12, 2020
6 must reads for the AEC industry today: August 12, 2020
UC Davis's new dining commons and the pandemic is revolutionizing healthcare benefits.
Market Data | Aug 11, 2020
6 must reads for the AEC industry today: August 11, 2020
Elevators can be a 100% touch-free experience and the construction industry adds 20,000 employees in July.
Market Data | Aug 10, 2020
Dodge Momentum Index increases in July
This month’s increase in the Dodge Momentum Index was the first in all of 2020.
Market Data | Aug 10, 2020
Construction industry adds 20,000 employees in July but nonresidential employment dips
Association warns skid will worsen without new relief.
Market Data | Aug 10, 2020
5 must reads for the AEC industry today: August 10, 2020
Private student housing owners reap the benefits as campus housing de-densifies and race for COVID vaccine boosts real estate in life sciences hubs.
Market Data | Aug 7, 2020
6 must reads for the AEC industry today: August 7, 2020
BD+C's 2020 Color Trends Report and HMC releases COVID-19 Campus Reboot Guide for Prek-12 schools.
Market Data | Aug 6, 2020
6 must reads for the AEC industry today: August 6, 2020
Oklahoma State's new North Academic Building and can smart buildings outsmart coronavirus?
Market Data | Aug 5, 2020
6 must reads for the AEC industry today: August 5, 2020
San Jose's new tallest tower and Virginia is the first state to adopt COVID-19 worker safety rules.
Market Data | Aug 4, 2020
7 must reads for the AEC industry today: August 4, 2020
Construction spending decreases for fourth consecutive month and 100% affordable housing development breaks ground in Mountain View.
Market Data | Aug 3, 2020
Construction spending decreases for fourth consecutive month in June
Association officials warn further contraction is likely unless federal government enacts prompt, major investment in infrastructure as state and local governments face deficits.