National nonresidential construction spending decreased by 1.8% in April, 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 $801.8 billion for the month, a 0.9% increase from April 2019.
Of the 16 subcategories, 13 were down on a monthly basis. Private nonresidential spending declined 1.3% in April, while public nonresidential construction spending was down 2.5% for the month.
“Nonresidential construction has fared far better than most economic segments during the COVID-19 crisis, but the industry’s headline spending numbers fail to fully capture the damage inflicted on many key segments by the pandemic,” said ABC Chief Economist Anirban Basu. “For instance, spending in the lodging category was down more than 12% in April relative to a year ago and down 11% in the amusement and recreation category. Spending is also down meaningfully in a number of categories that are public-sector intensive, including education and highway/street.
“In much of the nation, construction was deemed an essential industry, which helped to mitigate spending decreases,” said Basu. “But in many places, including in New York, New Jersey, Boston, Pennsylvania and California, construction was deemed nonessential. That has rendered ongoing work and backlog—which stood at 7.8 months in April, according to ABC’s Construction Backlog Indicator—less of an effective shield against the early stages of the broader economic downturn than it is normally. The nonresidential construction spending data would have been far worse but for a massive increase in spending in the public safety category, which is up 35% year over year due to investments made to shore up capacity to deal with COVID-19.
“As the nation slowly reopens, nonresidential contractors will face many challenges,” said Basu. “State and local government finances have been compromised, jeopardizing infrastructure spending going forward. Many office suites and storefronts have been vacated, which will suppress demand for new construction going forward. Capital will also be scarcer, resulting in greater difficulty securing financing for projects. Moreover, if the past is prologue, many dislocated construction workers will find jobs in other industries, given construction’s tendency to be among the last economic segments to fully recover.”
Related Stories
K-12 Schools | Mar 18, 2024
New study shows connections between K-12 school modernizations, improved test scores, graduation rates
Conducted by Drexel University in conjunction with Perkins Eastman, the research study reveals K-12 school modernizations significantly impact key educational indicators, including test scores, graduation rates, and enrollment over time.
MFPRO+ News | Mar 16, 2024
Multifamily rents stable heading into spring 2024
National asking multifamily rents posted their first increase in over seven months in February. The average U.S. asking rent rose $1 to $1,713 in February 2024, up 0.6% year-over-year.
Market Data | Mar 14, 2024
Download BD+C's March 2024 Market Intelligence Report
U.S. construction spending on buildings-related work rose 1.4% in January, but project teams continue to face headwinds related to inflation, interest rates, and supply chain issues, according to Building Design+Construction's March 2024 Market Intelligence Report (free PDF download).
Contractors | Mar 12, 2024
The average U.S. contractor has 8.1 months worth of construction work in the pipeline, as of February 2024
Associated Builders and Contractors reported that its Construction Backlog Indicator declined to 8.1 months in February, according to an ABC member survey conducted Feb. 20 to March 5. The reading is down 1.1 months from February 2023.
Market Data | Mar 6, 2024
Nonresidential construction spending slips 0.4% in January
National nonresidential construction spending decreased 0.4% in January, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.190 trillion.
Multifamily Housing | Mar 4, 2024
Single-family rentals continue to grow in BTR communities
Single-family rentals are continuing to grow in built-to-rent communities. Both rent and occupancy growth have been strong in recent months while remaining a financially viable option for renters.
MFPRO+ News | Mar 2, 2024
Job gains boost Yardi Matrix National Rent Forecast for 2024
Multifamily asking rents broke the five-month streak of sequential average declines in January, rising 0.07 percent, shows a new special report from Yardi Matrix.
K-12 Schools | Feb 29, 2024
Average age of U.S. school buildings is just under 50 years
The average age of a main instructional school building in the United States is 49 years, according to a survey by the National Center for Education Statistics (NCES). About 38% of schools were built before 1970. Roughly half of the schools surveyed have undergone a major building renovation or addition.
MFPRO+ Research | Feb 27, 2024
Most competitive rental markets of early 2024
The U.S. rental market in early 2024 is moderately competitive, with apartments taking an average of 41 days to find tenants, according to the latest RentCafe Market Competitivity Report.
Construction Costs | Feb 22, 2024
K-12 school construction costs for 2024
Data from Gordian breaks down the average cost per square foot for four different types of K-12 school buildings (elementary schools, junior high schools, high schools, and vocational schools) across 10 U.S. cities.