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
| Apr 17, 2012
Princeton Review releases “Guide to 322 Green Colleges”
The guide profiles 322 institutions of higher education in the U.S. and Canada that demonstrate notable commitments to sustainability in their academic offerings, campus infrastructure, activities and career preparation.
| Apr 17, 2012
FMI report examines federal construction trends
Given the rapid transformations occurring in the federal construction sector, FMI examines the key forces accelerating these changes, as well as their effect on the industry.
| Apr 17, 2012
Freese and Nichols awarded Malcolm Baldridge National Quality Award
Freese and Nichols is the only engineering and architecture firm to ever receive this recognition.
| Apr 17, 2012
Miramar College police substation in San Diego receives LEED Platinum
The police substation is the first higher education facility in San Diego County to achieve LEED Platinum Certification, the highest rating possible.
| Apr 17, 2012
Alberici receives 2012 ASA General Contractor of the Year award
Alberici has been honored by the ASA eight times in the award’s nineteen-year history--more than any other general contractor in its class.
| Apr 16, 2012
Freeland promoted to vice president at Heery International
Recently named to Building Design+Construction’s 40 Under 40 Class of 2012.
| Apr 16, 2012
University of Michigan study seeks to create efficient building design
The result, the researchers say, could be technologies capable of cutting the carbon footprint created by the huge power demands buildings place on the nation’s electrical grid.
| Apr 16, 2012
UNT lab designed to study green energy technologies completed
Lab to test energy technologies and systems in order to achieve a net-zero consumption of energy.
| Apr 16, 2012
Shawmut awarded Tag Heuer builds in Florida and Pennsylvania
Both projects are scheduled to be completed this spring.
| Apr 16, 2012
Batson-Cook breaks ground on senior living center in Brunswick, Ga.
Marks the third Benton House project constructed by Batson-Cook.
