National nonresidential construction spending grew 0.9% in November, 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 $930.1 billion for the month.
Spending was up on a monthly basis in nine of the 16 nonresidential subcategories. Private nonresidential spending was up 1.7%, while public nonresidential construction spending was down 0.1% in November.
“The average nonresidential contractor starts 2023 with considerable backlog,” said ABC Chief Economist Anirban Basu. “Not coincidentally, contractors also have significant confidence regarding current year prospects, according to ABC’s Construction Confidence Index, which indicates expectations for growth in sales and employment with margins remaining stable.
“November’s construction spending report suggests that this confidence is warranted,” said Basu. “However, there are countervailing considerations. First, growth in nonresidential construction spending in November was not especially broad. Much of the growth came from the manufacturing category, which is partially attributable to construction related to large-scale chip manufacturing facilities. The balance of growth came mostly from conservation and development, which includes flood control expenditures. Were it not for those two categories, nonresidential construction spending would have been roughly flat in November.
“Second, backlog could dry up,” said Basu. “Anecdotal evidence suggests that banks are more cautious in their lending to the commercial real estate and multifamily segments. Fears of recession this year remain pervasive in an environment characterized by high and rising interest rates. It will be interesting to see how well backlog will hold up as contractors continue to build and the economy heads toward what is likely to be a Federal Reserve-induced recession.”
Related Stories
Laboratories | Oct 5, 2022
Bigger is better for a maturing life sciences sector
CRB's latest report predicts more diversification and vertical integration in research and production.
Market Data | Aug 25, 2022
‘Disruptions’ will moderate construction spending through next year
JLL’s latest outlook predicts continued pricing volatility due to shortages in materials and labor
Market Data | Aug 2, 2022
Nonresidential construction spending falls 0.5% in June, says ABC
National nonresidential construction spending was down by 0.5% in June, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau.
Market Data | Jul 28, 2022
The latest Beck Group report sees earlier project collaboration as one way out of the inflation/supply chain malaise
In the first six months of 2022, quarter-to-quarter inflation for construction materials showed signs of easing, but only slightly.
Hotel Facilities | Jul 28, 2022
As travel returns, U.S. hotel construction pipeline growth follows
According to the recently released United States Construction Pipeline Trend Report from Lodging Econometrics (LE), the total U.S. construction pipeline stands at 5,220 projects/621,268 rooms at the close of 2022’s second quarter, up 9% Year-Over-Year (YOY) by projects and 4% YOY by rooms.
Codes and Standards | Jul 22, 2022
Hurricane-resistant construction may be greatly undervalued
New research led by an MIT graduate student at the school’s Concrete Sustainability Hub suggests that the value of buildings constructed to resist wind damage in hurricanes may be significantly underestimated.
Market Data | Jul 21, 2022
Architecture Billings Index continues to stabilize but remains healthy
Architecture firms reported increasing demand for design services in June, according to a new report today from The American Institute of Architects (AIA).
Market Data | Jul 21, 2022
Despite deteriorating economic conditions, nonresidential construction spending projected to increase through 2023
Construction spending on buildings is projected to increase just over nine percent this year and another six percent in 2023, according to a new report from the American Institute of Architects (AIA).
Building Team | Jul 18, 2022
Understanding the growing design-build market
FMI’s new analysis of the design-build market forecast for the next fives years shows that this delivery method will continue to grow, despite challenges from the COVID-19 pandemic.
Market Data | Jul 1, 2022
Nonresidential construction spending slightly dips in May, says ABC
National nonresidential construction spending was down by 0.6% in May, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau.