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
| Oct 5, 2011
GREENBUILD 2011: Software an architectural game changer
Interactive modeling software transforms the designbuild process.
| Oct 5, 2011
GREENBUILD 2011: Tile manufacturer attains third-party certification for waste recycling processes
Crossville has joined with TOTO to recycle that company’s pre-consumer fired sanitary ware.
| Oct 5, 2011
GREENBUILD 2011: Roof hatch designed for energy efficiency
The cover features a specially designed EPDM finger-type gasket that ensures a positive seal with the curb to reduce air permeability and ensure energy performance.
| Oct 4, 2011
GREENBUILD 2011
Click here for the latest news and products from Greenbuild 2011, Oct. 4-7, in Toronto.
| Oct 4, 2011
GREENBUILD 2011: Methods, impacts, and opportunities in the concrete building life cycle
Researchers at the Massachusetts Institute of Technology’s (MIT) Concrete Sustainability Hub conducted a life-cycle assessment (LCA) study to evaluate and improve the environmental impact and study how the “dual use” aspect of concrete.
| Oct 4, 2011
GREENBUILD 2011: Johnsonite features sustainable products
Products include rubber flooring tiles, treads, wall bases, and more.
| Oct 4, 2011
GREENBUILD 2011: Nearly seamless highly insulated glass curtain-wall system introduced
Low insulation value reflects value of entire curtain-wall system.
| Oct 4, 2011
GREENBUILD 2011: Ready-to-use wood primer unveiled
Maintains strong UV protection, clarity even with application of lighter, natural wood tones.
| Oct 4, 2011
GREENBUILD 2011: Two new recycled glass products announced
The two collections offer both larger and smaller particulates.
| Oct 4, 2011
GREENBUILD 2011: Mythic Paint launches two new paint products
A high performance paint, and a combination paint and primer now available.