According to an Associated Builders and Contractors analysis of U.S. Census Bureau data published today, national nonresidential construction spending declined 0.3% in July totaling $776 billion on a seasonally adjusted annualized basis, and increased 0.1% compared to July 2018. The June 2019 estimates were revised upward from $773.8 billion to $778.5 billion.
In July, private nonresidential spending decreased 0.8% on a monthly basis and 2.7% on a yearly basis. Public nonresidential spending, however, increased 0.4% for the month and 4.3% for the year.
"While there is much discussion regarding the extent to which the U.S. economy has slowed and will slow going forward, these considerations have relatively little to do with today's nonresidential construction spending data," said ABC Chief Economist Anirban Basu. "Trends in nonresidential construction tend to lag the broader economy by a year to 18 months, which means that today's construction spending numbers reflect in large measure broader economic dynamics characterizing 2018. Last year was a good one for the economy, persuading many to move ahead with projects.
"Recent construction spending data, therefore, have been impacted by factors more closely related to the industry," said Basu. "For instance, the recent weakening in certain private construction segments, including office and lodging, are likely due to growing concerns regarding overbuilding and the somewhat higher cost of capital. Public spending growth, despite solid numbers in July, has been more erratic of late. This may have something to do with the looming insolvency of the Highway Trust Fund, which is expected in 2021 without congressional action. There is already evidence that some states have begun to postpone planning for new projects until there is more clarity regarding federal infrastructure spending, evident in the 2.7% spending decline observed in the highway and street category.
"Despite recent slow growth in construction spending, the U.S. construction industry has continued to expand employment levels during the past year," said Basu. "ABC’s Construction Backlog Indicator continues to show that the average contractor or subcontractor will remain busy over the near term. One of the reasons for relatively slow growth in nonresidential construction spending may simply be that the U.S. contracting community cannot deliver significantly more service in the context of worsening labor/skills shortages. In other words, nonresidential construction volume may already be near its peak potential supply. Given that, one wouldn't expect substantial growth in construction spending even in the context of significantly stronger economic growth."
Related Stories
Industrial Facilities | Apr 9, 2024
Confessions of a cold storage architect
Designing energy-efficient cold storage facilities that keep food safe and look beautiful takes special knowledge.
Cultural Facilities | Apr 8, 2024
Multipurpose sports facility will be first completed building at Obama Presidential Center
When it opens in late 2025, the Home Court will be the first completed space on the Obama Presidential Center campus in Chicago. Located on the southwest corner of the 19.3-acre Obama Presidential Center in Jackson Park, the Home Court will be the largest gathering space on the campus. Renderings recently have been released of the 45,000-sf multipurpose sports facility and events space designed by Moody Nolan.
Green | Apr 8, 2024
LEED v5 released for public comment
The U.S. Green Building Council (USGBC) has opened the first public comment period for the first draft of LEED v5. The new version of the LEED green building rating system will drive deep decarbonization, quality of life improvements, and ecological conservation and restoration, USGBC says.
Codes and Standards | Apr 8, 2024
Boston’s plans to hold back rising seawater stall amid real estate slowdown
Boston has placed significant aspects of its plan to protect the city from rising sea levels on the actions of private developers. Amid a post-Covid commercial development slump, though, efforts to build protective infrastructure have stalled.
Sustainability | Apr 8, 2024
3 sustainable design decisions to make early
In her experience as an architect, Megan Valentine AIA, LEED AP, NCARB, WELL AP, Fitwel, Director of Sustainability, KTGY has found three impactful sustainable design decisions: site selection, massing and orientation, and proper window-to-wall ratios.
Brick and Masonry | Apr 4, 2024
Best in brick buildings: 9 projects take top honors in the Brick in Architecture Awards
The Ace Hotel Toronto, designed by Shim-Sutcliffe Architects, and the TCU Music Center by Bora Architecture & Interiors are among nine "Best in Class" winners and 44 overall winners in the Brick Industry Association's 2023 Brick in Architecture Awards.
Retail Centers | Apr 4, 2024
Retail design trends: Consumers are looking for wellness in where they shop
Consumers are making lifestyle choices with wellness in mind, which ignites in them a feeling of purpose and a sense of motivation. That’s the conclusion that the architecture and design firm MG2 draws from a survey of 1,182 U.S. adult consumers the firm conducted last December about retail design and what consumers want in healthier shopping experiences.
Healthcare Facilities | Apr 3, 2024
Foster + Partners, CannonDesign unveil design for Mayo Clinic campus expansion
A redesign of the Mayo Clinic’s downtown campus in Rochester, Minn., centers around two new clinical high-rise buildings. The two nine-story structures will reach a height of 221 feet, with the potential to expand to 420 feet.
Sports and Recreational Facilities | Apr 2, 2024
How university rec centers are evolving to support wellbeing
In a LinkedIn Live, Recreation & Wellbeing’s Sadat Khan and Abby Diehl joined HOK architect Emily Ostertag to discuss the growing trend to design and program rec centers to support mental wellbeing and holistic health.
Architects | Apr 2, 2024
AE Works announces strategic acquisition of WTW Architects
AE Works, an award-winning building design and consulting firm is excited to announce that WTW Architects, a national leader in higher education design, has joined the firm.