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
| Jul 18, 2013
LEGO takes on the iconic Sydney Opera House
This September, LEGO will expand its LEGO Creator Expert series with a 2,989-brick model of the iconic Sydney Opera House.
| Jul 17, 2013
Top Multifamily Construction Firms [2013 Giants 300 Report]
Lend Lease, Clark Group, Balfour Beatty top Building Design+Construction's 2013 ranking of the largest multifamily contractors and construction management firms in the United States.
| Jul 17, 2013
Top Multifamily Engineering Firms [2013 Giants 300 Report]
STV, URS, AECOM top Building Design+Construction's 2013 ranking of the largest multifamily engineering and engineering/architecture firms in the United States.
| Jul 17, 2013
Top Multifamily Architecture Firms [2013 Giants 300 Report]
IBI Group, Niles Bolton, Perkins Eastman top Building Design+Construction's 2013 ranking of the largest multifamily architecture and architecture/engineering firms in the United States.
| Jul 17, 2013
McLaughlin named Executive Director of the Builders Association
The Executive Committee of the Builders Association welcomes Dan McLaughlin as the new Executive Director. Dan comes to the Builders Association after twenty one years as the Executive Director of the Plumbing Contractors Association Of Chicago.
| Jul 17, 2013
CBRE recognizes nation's best green research projects
A rating system for comparative tenant energy use and a detailed evaluation of Energy Star energy management strategies are among the green research projects to be honored by commercial real estate giant CBRE Group.
| Jul 17, 2013
Retail store openings at five-year high
Analysis by RBC Capital Markets shows that U.S. retailers are planning to open 42,757 stores over the next 12 months, and some 83,700 locations over the next two years, both five-year highs.
| Jul 16, 2013
As the U.S. economy sputters back to life, contractors wait for the green light on projects [2013 Giants 300 Report]
There are enough positive indictors in the economy to justify greenlighting projects, but building owners and developers remain reluctant to pull the trigger.
| Jul 16, 2013
Top Construction Management Firms [2013 Giants 300 Report]
URS, STV, JE Dunn top Building Design+Construction's 2013 ranking of the largest construction management and project management firms in the United States.
| Jul 16, 2013
Top Contractors [2013 Giants 300 Report]
Turner, Fluor, Skanska top Building Design+Construction's 2013 ranking of the largest contractors in the United States.