According to an Associated Builders and Contractors analysis of U.S. Census Bureau data released today, national nonresidential construction spending rose 1.2% in February. Seasonally adjusted nonresidential spending totaled $773.8 billion, a 4.8% increase over the same time last year.
Private nonresidential spending fell 0.5% for the month and is only up 0.1% on a year-over-year basis. Public nonresidential spending is up 3.7% for the month and an impressive 12.1% for the year. Highway and street (+9.6%), water supply (+5.2%) and sewage and waste disposal (+5%) spending experienced the largest monthly increases in February, while religious (-4%) and transportation (-3.8%) spending experienced the largest decreases.
“A number of economic readings have come in weaker than expected of late, including retail sales and February employment,” said ABC Chief Economist Anirban Basu. “Now private nonresidential construction has effectively flatlined during the past year, with spending virtually unchanged on a year-ago basis despite higher materials costs. This suggests that the actual physical amount of construction put in place has declined in real terms during the past year.
“As is often the case, it’s tempting to blame the weather,” said Basu. “It is absolutely true that the upper Midwest and New England were hit hard by precipitation and bitterly cold temperatures this winter, which undoubtedly suppressed some level of activity. However, softer growth in private nonresidential construction has been apparent for months. This is not a new phenomenon. Spending in the office, commercial and lodging categories was flat to declining in February.
“By contrast, public nonresidential construction spending was up sharply,” said Basu. “This strongly suggests that there is more at work than weather in terms of factors shaping the data. State and local government finances have continued to improve as the broader economy has expanded. America has generated job growth for 101 consecutive months, which has helped push income tax collections higher and unemployment insurance payments lower. Property values also have risen, as have sales tax collections.
“The standout is the highway and street category, which has experienced nearly 23% growth in spending on a year-over-year basis,” Basu added. “Policymakers also have been paying considerable attention to flood control (with conservation and development up 19% year over year) and water systems (with water supply up nearly 12%).”
Related Stories
Market Data | Mar 18, 2021
Commercial Construction Contractors’ Outlook lifts on rising revenue expectations
Concerns about finding skilled workers, material costs, and steel tariffs linger.
Market Data | Mar 16, 2021
Construction employment in January lags pre-pandemic mark in 42 states
Canceled projects, supply-chain woes threaten future jobs.
Market Data | Mar 15, 2021
Rising materials prices and supply chain disruptions are hurting many construction firms
The same firms are already struggling to cope with pandemic impacts.
Market Data | Mar 11, 2021
Soaring materials costs, supply-chain problems, and project cancellations continue to impact construction industry
Costs and delayed deliveries of materials, parts, and supplies are vexing many contractors.
Market Data | Mar 8, 2021
Construction employment declines by 61,000 in February
Association officials urge congress and Biden administration to focus on new infrastructure funding.
Market Data | Mar 2, 2021
Construction spending rises in January as private nonresidential sector stages rare gain
Private nonresidential market shrinks 10% since January 2020 with declines in all 11 segments.
Market Data | Feb 24, 2021
2021 won’t be a growth year for construction spending, says latest JLL forecast
Predicts second-half improvement toward normalization next year.
Market Data | Feb 23, 2021
Architectural billings continue to contract in 2021
AIA’s Architecture Billings Index (ABI) score for January was 44.9 compared to 42.3 in December.
Healthcare Facilities | Feb 18, 2021
The Weekly show, Feb 18, 2021: What patients want from healthcare facilities, and Post-COVID retail trends
This week on The Weekly show, BD+C editors speak with AEC industry leaders from JLL and Landini Associates about what patients want from healthcare facilities, based on JLL's recent survey of 4,015 patients, and making online sales work for a retail sector recovery.
Market Data | Feb 17, 2021
Soaring prices and delivery delays for lumber and steel squeeze finances for construction firms already hit by pandemic
Association officials call for removing tariffs on key materials to provide immediate relief for hard-hit contractors and exploring ways to expand long-term capacity for steel, lumber and other materials,