National nonresidential construction spending increased by 1.6% in January and is up 5.1% on a year-ago basis, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, spending totaled a record $806.9 billion in January.
Private nonresidential spending rose 0.8% on a monthly basis and is up 0.5% compared to the same time last year. Public nonresidential construction spending also increased, rising 2.6% for the month and 12.3% on a year over year basis.
“Despite all the focus on the dislocating impacts of the coronavirus, construction—a key element of the U.S. economy—continues to perform,” said ABC Chief Economist Anirban Basu. “For the first time in history, the volume of nonresidential construction spending exceeded $800 billion on an annualized basis and now stands at an all-time high. Both public and private nonresidential construction spending expanded to start 2020, a reflection of the broader economic momentum evident over the last several years. Backlog remains healthy, according to the ABC Construction Backlog Indicator, and with the nation continuing to add jobs, there is more demand for public and private construction and additional funding resources. This is especially apparent in several infrastructure categories, in which spending growth continues to be robust due to healthier state and local government finances.
“That said, there is no question that the coronavirus has significantly compromised both global and national economic momentum over the past two to three weeks,” said Basu. “U.S. manufacturing and shipping segments have begun to soften, with significant reductions in container volume already being reported at several major U.S. ports. While the crisis is expansive enough to potentially drive the economy into recession, the question is whether the crisis is severe enough to countervail current U.S. economic momentum.
“At this time, it is unclear how coronavirus will affect materials prices,” said Basu. “Certain construction components, whether from China or elsewhere, may experience inadequate supply during the weeks ahead, and the more general impact will be decreased input prices due to lower demand. This is likely to be the case for a number of key commodities, including those related to energy.”
Related Stories
Market Data | Feb 10, 2016
Nonresidential building starts and spending should see solid gains in 2016: Gilbane report
But finding skilled workers continues to be a problem and could inflate a project's costs.
Market Data | Feb 9, 2016
Cushman & Wakefield is bullish on U.S. economy and its property markets
Sees positive signs for construction and investment growth in warehouses, offices, and retail
Market Data | Feb 5, 2016
CMD/Oxford forecast: Nonresidential building growth will recover modestly in 2016
Increased government spending on infrastructure projects should help.
Market Data | Feb 4, 2016
Mortenson: Nonresidential construction costs expected to increase in six major metros
The Construction Cost Index, from Mortenson Construction, indicated rises between 3 and 4% on average.
Contractors | Feb 1, 2016
ABC: Tepid GDP growth a sign construction spending may sputter
Though the economy did not have a strong ending to 2015, the data does not suggest that nonresidential construction spending is set to decline.
Data Centers | Jan 28, 2016
Top 10 markets for data center construction
JLL’s latest outlook foresees a maturation in certain metros.
Market Data | Jan 20, 2016
Nonresidential building starts sag in 2015
CDM Research finds only a few positive signs among the leading sectors.
Market Data | Jan 20, 2016
Architecture Billings Index ends year on positive note
While volatility persists, architecture firms reported healthy performance for 2015.
Market Data | Jan 15, 2016
ABC: Construction material prices continue free fall in December
In December, construction material prices fell for the sixth consecutive month. Prices have declined 7.2% since peaking in August 2014.
Market Data | Jan 13, 2016
Morgan Stanley bucks gloom and doom, thinks U.S. economy has legs through 2020
Strong job growth and dwindling consumer debt give rise to hope.