National nonresidential construction spending declined 1.8% in June, totaling $773.8 billion on a seasonally adjusted annualized basis—a 2.3% increase compared to the same time a year ago, according to an Associated Builders and Contractors analysis of U.S. Census Bureau data published today. Public nonresidential spending fell 3.7% in June, but is up 6.4% year over year, while private nonresidential spending fell 0.3% on a monthly basis and is up 0.4% from June 2018.
Among the 16 nonresidential construction spending categories tracked by the Census Bureau, seven experienced increases in monthly spending, although only the conservation and development (+3.8%) and commercial (+1.3%) categories increased by more than 1%. While spending in several categories fell for the month, significant decreases in the publicly driven educational (-6.5%) and highway and street (-6.3%) categories accounted for nearly all of the monthly decline.
“Like the balance of the U.S. economy, nonresidential construction spending appears to be softening, albeit gradually,” said ABC Chief Economist Anirban Basu. “Private nonresidential construction spending has been trending lower for several months, and segments like office and lodging are no longer the drivers of construction spending growth that they had been, likely due to growing concerns about market saturation.
“The dip in public construction may have been merely temporary, which is likely the case given the ongoing strength of state and local government finances.” said Basu. “And with the economy still adding substantial numbers of jobs, wages growing at or near a decade-high pace, consumers continuing to spend and property values remaining stable, local and state governments should continue to experience solid income, retail and real estate tax collections. All things being equal, that should help fuel infrastructure outlays, especially given still very low borrowing costs.
“While many observers continue to focus on issues such as trade disputes, high levels of corporate debt and asset prices that are susceptible to sharp declines, the U.S. construction industry’s most significant source of uncertainty may be the pending insolvency of the Highway Trust Fund,” said Basu. “That insolvency is now a mere two years away, and if policymakers fail to act expeditiously, state and local policymakers may choose to postpone certain projects given the rising uncertainty of federal funding. The highway/street and transportation categories are especially vulnerable to such dynamics.”
Related Stories
Mass Timber | Dec 1, 2022
Cross laminated timber market forecast to more than triple by end of decade
Cross laminated timber (CLT) is gaining acceptance as an eco-friendly building material, a trend that will propel its growth through the end of the 2020s. The CLT market is projected to more than triple from $1.11 billion in 2021 to $3.72 billion by 2030, according to a report from Polaris Market Research.
Market Data | Nov 15, 2022
Construction demand will be a double-edged sword in 2023
Skanska’s latest forecast sees shorter lead times and receding inflation, but the industry isn’t out of the woods yet.
Reconstruction & Renovation | Nov 8, 2022
Renovation work outpaces new construction for first time in two decades
Renovations of older buildings in U.S. cities recently hit a record high as reflected in architecture firm billings, according to the American Institute of Architects (AIA).
Market Data | Nov 3, 2022
Building material prices have become the calm in America’s economic storm
Linesight’s latest quarterly report predicts stability (mostly) through the first half of 2023
Building Team | Nov 1, 2022
Nonresidential construction spending increases slightly in September, says ABC
National nonresidential construction spending was up by 0.5% in September, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau.
Hotel Facilities | Oct 31, 2022
These three hoteliers make up two-thirds of all new hotel development in the U.S.
With a combined 3,523 projects and 400,490 rooms in the pipeline, Marriott, Hilton, and InterContinental dominate the U.S. hotel construction sector.
Codes and Standards | Oct 26, 2022
‘Landmark study’ offers key recommendations for design-build delivery
The ACEC Research Institute and the University of Colorado Boulder released what the White House called a “landmark study” on the design-build delivery method.
Building Team | Oct 26, 2022
The U.S. hotel construction pipeline shows positive growth year-over-year at Q3 2022 close
According to the third quarter Construction Pipeline Trend Report for the United States from Lodging Econometrics (LE), the U.S. construction pipeline stands at 5,317 projects/629,489 rooms, up 10% by projects and 6% rooms Year-Over-Year (YOY).
Designers | Oct 19, 2022
Architecture Billings Index moderates but remains healthy
For the twentieth consecutive month architecture firms reported increasing demand for design services in September, according to a new report today from The American Institute of Architects (AIA).
Market Data | Oct 17, 2022
Calling all AEC professionals! BD+C editors need your expertise for our 2023 market forecast survey
The BD+C editorial team needs your help with an important research project. We are conducting research to understand the current state of the U.S. design and construction industry.