National nonresidential construction spending expanded 0.7% in August to its highest level since the U.S. Census Bureau began the data series in 2002, according to an Associated Builders and Contractors analysis released today.
Total nonresidential spending stood at $762.7 billion on a seasonally adjusted, annualized rate in August, which represents an increase of 8.4% compared to one year ago. Private nonresidential spending fell 0.2% in August largely due to a 1.3% decline in power-related spending, the largest private construction spending category, and public nonresidential spending increased 2%.
“The good news on the nation’s economy and the construction sector just keeps coming,” said ABC Chief Economist Anirban Basu. “The increase in overall nonresidential construction spending was reasonably predictable given the predominance of positive leading indicators such as ABC’s Construction Backlog Indicator, which reported record-setting 9.9 months of backlog in the second quarter of this year, and the Architectural Billings Index. In addition, the recent pattern of stable private construction spending coupled with growing public spending remained in place in August.
“Rising property values, ongoing rapid job creation and a confident consumer translates into rising real estate values, income and retail sales tax collections, which in turn creates additional resources to invest in infrastructure,” said Basu. “That helps explain the chunky year-over-year spending increases in a number of primarily publicly financed categories, including water supply, which increased 37%; conservation and development, 34%; transportation, 23%; and highway/street, 14%.
“It is quite possible that construction spending growth will accelerate from current levels,” said Basu. “Aside from the strong economy, ongoing increases in materials prices and worker compensation is translating into rising project delivery costs, which, all things being equal, produces faster construction spending growth.
“For now, rising construction and borrowing costs are not stifling economic activity,” said Basu. “However, purchasers of construction services may be increasingly inclined to postpone projects if costs continue to rise, which is likely. And while contractors remain concerned about the overall construction workforce shortage negatively affecting project deadlines, the near-term outlook remains robust.”
Related Stories
AEC Tech | Mar 9, 2024
9 steps for implementing digital transformation in your AEC business
Regardless of a businesses size and type, digital solutions like workflow automation software, AI-based analytics, and integrations can significantly enhance efficiency, productivity, and competitiveness.
Sports and Recreational Facilities | Mar 7, 2024
Bjarke Ingels’ design for the Oakland A’s new Las Vegas ballpark resembles ‘a spherical armadillo’
Designed by Bjarke Ingels Group (BIG) in collaboration with HNTB, the new ballpark for the Oakland Athletics Major League Baseball team will be located on the Las Vegas Strip and offer panoramic views of the city skyline. The 33,000-capacity covered, climate-controlled stadium will sit on nine acres on Las Vegas Boulevard.
Adaptive Reuse | Mar 7, 2024
3 key considerations when converting a warehouse to a laboratory
Does your warehouse facility fit the profile for a successful laboratory conversion that can demand higher rents and lower vacancy rates? Here are three important considerations to factor before proceeding.
Shopping Centers | Mar 7, 2024
How shopping centers can foster strong community connections
In today's retail landscape, shopping centers are evolving beyond mere shopping destinations to become vibrant hubs of community life. Here are three strategies from Nadel Architecture + Planning for creating strong local connections.
Market Data | Mar 6, 2024
Nonresidential construction spending slips 0.4% in January
National nonresidential construction spending decreased 0.4% in January, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.190 trillion.
MFPRO+ Special Reports | Mar 6, 2024
Top 10 trends in senior living facilities for 2024
The 65-and-over population is growing faster than any other age group. Architects, engineers, and contractors are coming up with creative senior housing solutions to better serve this burgeoning cohort.
Office Buildings | Mar 5, 2024
Former McDonald’s headquarters transformed into modern office building for Ace Hardware
In Oak Brook, Ill., about 15 miles west of downtown Chicago, McDonald’s former corporate headquarters has been transformed into a modern office building for its new tenant, Ace Hardware. Now for the first time, Ace Hardware can bring 1,700 employees from three facilities under one roof.
Green | Mar 5, 2024
New York City’s Green Economy Action Plan aims for building decarbonization
New York City’s recently revealed Green Economy Action Plan includes the goals of the decarbonization of buildings and developing a renewable energy system. The ambitious plan includes enabling low-carbon alternatives in the transportation sector and boosting green industries, aiming to create more than 12,000 green economy apprenticeships by 2040.
MFPRO+ News | Mar 1, 2024
Housing affordability, speed of construction are top of mind for multifamily architecture and construction firms
The 2023 Multifamily Giants get creative to solve the affordability crisis, while helping their developer clients build faster and more economically.
K-12 Schools | Feb 29, 2024
Average age of U.S. school buildings is just under 50 years
The average age of a main instructional school building in the United States is 49 years, according to a survey by the National Center for Education Statistics (NCES). About 38% of schools were built before 1970. Roughly half of the schools surveyed have undergone a major building renovation or addition.