Nonresidential construction spending dipped in February, falling 1.4% on a monthly basis according to analysis of U.S. Census Bureau data released by Associated Builders and Contractors (ABC).
Spending in the nonresidential sector totaled $690.3 billion on a seasonally adjusted, annualized basis in February. While this represents a step back from January's figure of $700.3 billion (revised down from $701.9 billion), it is still 1.5% higher than the level of spending registered in December 2015 and 10.1% higher than February 2015.
"February's weather was particularly harsh in certain parts of the country, including in the economic activity-rich Mid-Atlantic region, and that appears to have had an undue effect on construction spending data," ABC Chief Economist Anirban Basu said. "February data are always difficult to interpret, and the latest nonresidential construction spending figures are no different. Seasonal factors have also made state-level data very difficult to interpret.
"Beyond meteorological considerations, there are other reasons not to be alarmed by February's decline in nonresidential construction spending," Basu said. "Today's positive construction employment report indicates continued economic growth. Moreover, much of the decline in volume was attributable to manufacturing, but the ISM manufacturing index recently crossed the threshold 50 level, indicating that domestic manufacturing is now expanding for the first time in seven months."
Eight of the 16 nonresidential subsectors experienced spending decreases in February, though almost half of the total decline in spending is attributable to the 5.9% decline in manufacturing-related spending.
The following 16 nonresidential construction sectors experienced spending increases in February on a monthly basis:
- Spending in the amusement and recreation category climbed 0.4% from January and is up 13.7% from February 2015.
- Lodging-related spending is up 0.4% for the month and is up 30.1% on a year-ago basis.
- Water supply-related spending expanded 1.9% on a monthly basis and 3.2% on a yearly basis.
- Spending in the office category grew 3.8% from January and is up 25.3% on a year-ago basis.
- Transportation-related spending expanded 0.5% month-over-month and 5.8% year-over-year.
- Health care-related spending expanded 2% from January and is up 3.3% from February 2015.
- Public safety-related spending is up 1.8% for the month, but is down 5.3% for the year.
- Commercial-related construction spending inched 0.1% higher for the month and grew 11% for the year.
Spending in eight of the nonresidential construction subsectors fell in February on a monthly basis:
- Educational-related construction spending fell 2.4% from January, but has expanded 8.5% on a yearly basis.
- Communication-related spending fell 15% month-over-month, but expanded 11.8% year-over-year.
- Spending in the highway and street category fell 2% from January, but is 24.5 higher than one year ago.
- Sewage and waste disposal-related spending fell 2.4% for the month, but is up 2.3% for the year.
- Conservation and development-related spending is 4.6% lower on a monthly basis and 16.8% lower on a year-over-year basis.
- Spending in the religious category fell 4% for the month and is up just 0.7% for the year.
- Manufacturing-related spending fell 5.9% on a monthly basis and is up only 0.8% on a yearly basis.
- Spending in the power category fell 0.6% from January, but is 4.8% higher than one year ago.
Related Stories
Contractors | Jun 21, 2016
Bigness counts when it comes to construction backlogs
Large companies that can attract talent are better able to commit to more work, according to a national trade group for builders and contractors.
Market Data | Jun 14, 2016
Transwestern: Market fundamentals and global stimulus driving economic growth
A new report from commercial real estate firm Transwestern indicates steady progress for the U.S. economy. Consistent job gains, wage growth, and consumer spending have offset declining corporate profits, and global stimulus plans appear to be effective.
Market Data | Jun 7, 2016
Global construction disputes took longer to resolve in 2015
The good news: the length and value of disputes in the U.S. fell last year, according to latest Arcadis report.
Market Data | Jun 3, 2016
JLL report: Retail renovation drives construction growth in 2016
Retail construction projects were up nearly 25% year-over-year, and the industrial and office construction sectors fared well, too. Economic uncertainty looms over everything, however.
Market Data | Jun 2, 2016
ABC: Nonresidential construction spending down in April
Lower building material prices, a sluggish U.S. economy, and hesitation among private developers all factor into the 2.1% drop.
Market Data | May 20, 2016
Report: Urban area population growth slows
Older Millennials are looking to buy homes and move away to more affordable suburbs and exurbs.
Market Data | May 17, 2016
Modest growth for AIA’s Architecture Billings Index in April
The American Institute of Architects reported the April ABI score was 50.6, down from the mark of 51.9 in the previous month. This score still reflects an increase in design services.
Market Data | Apr 29, 2016
ABC: Quarterly GDP growth slowest in two years
Bureau of Economic Analysis data indicates that the U.S. output is barely growing and that nonresidential investment is down.
Market Data | Apr 20, 2016
AIA: Architecture Billings Index ends first quarter on upswing
The multi-family residential sector fared the best. The Midwest was the only U.S. region that didn't see an increase in billings.
Building Technology | Apr 11, 2016
A nascent commercial wireless sensor market is poised to ascend in the next decade
Europe and Asia will propel that growth, according to a new report from Navigant.