Currently Reading

Nonres construction spending down again in May


Nonres construction spending down again in May

And the industry is still beset with labor and materials issues that could impede future growth

By John Caulfield, Senior Editor | July 1, 2021
Since May 2020, spending on nonresidential construction has been on a downward trend.
Since May 2020, spending on nonresidential construction has been on a downward trend.

In its first-quarter index of Construction Confidence, the Associated Builders and Contractors (ABC) found that 55% of contractors expected their sales to increase over the following six months, and only 19% thought their sales would decline in that period.

They might need to recalibrate their exuberance, in light of the trade group’s latest analysis of data published by the U.S. Census Bureau, which ABC released today. It estimates that national nonresidential construction spending in May, at $784.5 billion, was down 7.1% from the same month a year ago, and off 0.7% from spending levels in April 2021.

On a year-over-year basis, spending for every nonresidential category that ABC tracks, except sewage and waste disposal, was negative. Spending on public safety projects—which surged during the early months of the pandemic—showed the greatest decline in May, 39.6%, and lodging also took a big hit (off 23.3% to $22.6 billion). On the other hand, spending in May on healthcare construction, nearly $47 billion, was down only marginally, by 1.5%, compared to the same month a year ago.



Spending for public safety and lodging projects took the steepest hit in May

Construction spending for public safety and lodging projects showed the steepest declines in May compared to the same month a year ago.


A red-hot data center market hasn’t spelled more office construction, notes Anirban Basu, ABC’s Chief Economist. Basu also points out that while some private construction segments are struggling under the dislocating impacts of the pandemic, public nonresidential construction actually has declined more rapidly than the private sector over the past year.

Basu sees some hope for the future. Public construction spending should benefit from improvements in state and local governments’ financial conditions. But he tempers his predictions because of still-high construction materials prices and “deeply problematic” worker shortages. Basu expressed some concern, too, about the disproportionate amount of spending moving toward residential construction, which accounted for 41% of the pre-pandemic total and 49% in May.

Related Stories

Contractors | Sep 23, 2021

California office/lab construction site earns world’s first TRUE preconstruction zero-waste certification

Located on a former landfill, the Genesis Marina project site is expected to divert over 90% of its waste from landfills and incineration.

Contractors | Sep 23, 2021

No summer vacation for the GC Kraus Anderson

Since late July, it has completed enlargements and improvements of three schools and a clinic, and the creation of a police-fire station complex.

Contractors | Sep 23, 2021

Balfour Beatty’s outreach to veterans pays dividends in leadership and growth

Contracts for work it’s done for the San Diego Unified School District have extended to several disabled vet-owned businesses.

Multifamily Housing | Sep 22, 2021

11 notable multifamily projects to debut in 2021

A residence for older LGBTQ+ persons, a P3 student housing building, and a converted masonic lodge highlight the multifamily developments to debut this year. 

Data Centers | Sep 22, 2021

Wasted energy from data centers could power nearby buildings

A Canadian architecture firm comes up with a concept for a community that’s part of a direct-current microgrid.

Hotel Facilities | Sep 22, 2021

Will hotel developers finally embrace modular construction?

Last May, MiTek, a construction software and building services company that’s part of Warren Buffett’s Berkshire Hathaway conglomerate, formed a partnership with Danny Forster & Architecture to promote modular design and construction.

Contractors | Sep 3, 2021

Construction demand continues to outpace the industry’s workforce capacity

Skilled worker shortages are causing project delays, and even cancellations, according to latest AGC-Autodesk survey.

Multifamily Housing | Sep 1, 2021

Top 10 outdoor amenities at multifamily housing developments for 2021

Fire pits, lounge areas, and covered parking are the most common outdoor amenities at multifamily housing developments, according to new research from Multifamily Design+Construction.

Giants 400 | Aug 30, 2021

2021 Giants 400 Report: Ranking the largest architecture, engineering, and construction firms in the U.S.

The 2021 Giants 400 Report includes more than 130 rankings across 25 building sectors and specialty categories.

Laboratories | Aug 30, 2021

Science in the sky: Designing high-rise research labs

Recognizing the inherent socioeconomic and environmental benefits of high-density design, research corporations have boldly embraced high-rise research labs. 

More In Category

Magazine Subscription

Get our Newsletters

Each day, our editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.


Follow BD+C: