Nonresidential construction spending inched 0.3 percent lower in July largely due to a significant upward revision to June’s spending figure, according to analysis of U.S. Census Bureau data released today by Associated Builders and Contractors (ABC). Nonresidential spending totaled $701.4 billion on a seasonally adjusted annualized basis in July, the second highest month since November of 2008, right behind June, which was revised upward from $682 billion to $703.5 billion. Public nonresidential spending continued to falter, declining 3.2 percent for the month and 6.5 percent for the year.
Nonresidential construction spending has been suppressed over the last year or so with the primary factor being the lack of momentum in public spending. “This lack of public investment continues despite obvious deficiencies in water, road and other forms of infrastructure. The fact that all but two of the 12 public nonresidential public subsectors declined in July shows that the malaise is widespread,” says ABC Chief Economist Anirban Basu in a press release.
The second biggest factor deals with tightening commercial real estate standards that may have been brought on by growing regulatory pressures. “There is growing concern that key commercial real estate segments are in the process of being overbuilt, particularly in America’s largest cities, which are most likely to attract significant levels of foreign investment,” Basu says.
All is not negative, however, as the housing sector has begun to improve at a meaningful rate and the country continues to add a substantial number of jobs. Additionally, interest rates remain low.
Related Stories
Market Data | Jan 10, 2023
Construction backlogs at highest level since Q2 2019, says ABC
Associated Builders and Contractors reports today that its Construction Backlog Indicator remained unchanged at 9.2 months in December 2022, according to an ABC member survey conducted Dec. 20, 2022, to Jan. 5, 2023. The reading is one month higher than in December 2021.
Market Data | Jan 6, 2023
Nonresidential construction spending rises in November 2022
Spending on nonresidential construction work in the U.S. was up 0.9% in November versus the previous month, and 11.8% versus the previous year, according to the U.S. Census Bureau.
Industry Research | Dec 28, 2022
Following a strong year, design and construction firms view 2023 cautiously
The economy and inflation are the biggest concerns for U.S. architecture, construction, and engineering firms in 2023, according to a recent survey of AEC professionals by the editors of Building Design+Construction.
Self-Storage Facilities | Dec 16, 2022
Self-storage development booms in high multifamily construction areas
A 2022 RentCafe analysis finds that self-storage units swelled in conjunction with metros’ growth in apartment complexes.
Market Data | Dec 13, 2022
Contractors' backlog of work reaches three-year high
U.S. construction firms have, on average, 9.2 months of work in the pipeline, according to ABC's latest Construction Backlog Indicator.
Contractors | Dec 6, 2022
Slow payments cost the construction industry $208 billion in 2022
The cost of floating payments for wages and invoices represents $208 billion in excess cost to the construction industry, a 53% increase from 2021, according to a survey by Rabbet, a provider of construction finance software.
Mass Timber | Dec 1, 2022
Cross laminated timber market forecast to more than triple by end of decade
Cross laminated timber (CLT) is gaining acceptance as an eco-friendly building material, a trend that will propel its growth through the end of the 2020s. The CLT market is projected to more than triple from $1.11 billion in 2021 to $3.72 billion by 2030, according to a report from Polaris Market Research.
Market Data | Nov 15, 2022
Construction demand will be a double-edged sword in 2023
Skanska’s latest forecast sees shorter lead times and receding inflation, but the industry isn’t out of the woods yet.
Reconstruction & Renovation | Nov 8, 2022
Renovation work outpaces new construction for first time in two decades
Renovations of older buildings in U.S. cities recently hit a record high as reflected in architecture firm billings, according to the American Institute of Architects (AIA).
Market Data | Nov 3, 2022
Building material prices have become the calm in America’s economic storm
Linesight’s latest quarterly report predicts stability (mostly) through the first half of 2023