Nonresidential construction spending expanded 0.5% in August, totaling $691.8 billion on a seasonally adjusted, annualized basis, according to an analysis of data from the U.S. Census Bureau by Associated Builders and Contractors (ABC). Though this represents an improvement from July’s total ($688.2 billion), nonresidential spending remains 3.4 percent below its year-ago level and is down 3.8 percent from the cyclical peak attained in May 2017.
Spending levels expanded in 10 of the 16 nonresidential construction subsectors in August on a monthly basis. The manufacturing subsector experienced the largest absolute monthly decline (-$2.6 billion) and the greatest year-over-year decline (-$16.1 billion).
“Though nonresidential construction spending expanded in August, there is a disconnect between spending data and other data characterizing the level of activity, including backlog and employment,” said ABC Chief Economist Anirban Basu. “Collectively, nonresidential construction firms continue to hire, and staffing levels are well ahead of year-ago levels. That is consistent with a busier industry. ABC’s Construction Backlog Indicator (CBI) also continues to show that the average nonresidential construction firm can expect to remain busy, with a significant amount of future work already under contract. But the spending data show that the industry has actually become somewhat less busy over the past year.
“There are a number of possible explanations,” said Basu. “One is that employers may be forced in many instances to replace each retiring skilled worker with more than one employee. This is also consistent with declining industry productivity measured in terms of output per hour worked.
“Another possibility is that the construction segments that have been expanding in recent years are more labor intensive than those in which spending has been in decline,” said Basu. “Spending declines have been especially noteworthy in several capital-intensive public spending segments, including conservation and development and sewage and waste disposal. By contrast, spending increases over roughly the past three years have been apparent in segments requiring many workers specializing in high-quality finishes, including in the lodging and office categories.”
Related Stories
Construction Costs | Jan 22, 2024
Construction material prices continue to normalize despite ongoing challenges
Gordian’s most recent Quarterly Construction Cost Insights Report for Q4 2023 describes an industry still attempting to recover from the impact of COVID. This was complicated by inflation, weather, and geopolitical factors that resulted in widespread pricing adjustments throughout the construction materials industries.
Multifamily Housing | Jan 15, 2024
Multifamily rent growth rate unchanged at 0.3%
The National Multifamily Report by Yardi Matrix highlights the highs and lows of the multifamily market in 2023. Despite strong demand, rent growth remained unchanged at 0.3 percent.
Apartments | Jan 9, 2024
Apartment developer survey indicates dramatic decrease in starts this year
Over 56 developers, operators, and investors across the country were surveyed in John Burns Research and Consulting's recently-launched Apartment Developer and Investor Survey.
Self-Storage Facilities | Jan 5, 2024
The state of self-storage in early 2024
As the housing market cools down, storage facilities suffer from lower occupancy and falling rates, according to the December 2023 Yardi Matrix National Self Storage Report.
Urban Planning | Dec 18, 2023
The impacts of affordability, remote work, and personal safety on urban life
Data from Gensler's City Pulse Survey shows that although people are satisfied with their city's experience, it may not be enough.
MFPRO+ News | Dec 11, 2023
U.S. poorly prepared to house growing number of older adults
The U.S. is ill-prepared to provide adequate housing for the growing ranks of older people, according to a report from Harvard University’s Joint Center for Housing Studies. Over the next decade, the U.S. population older than 75 will increase by 45%, growing from 17 million to nearly 25 million, with many expected to struggle financially.
Industry Research | Dec 9, 2023
Two new reports provide guidance for choosing healthier building products
The authors, Perkins&Will and the Healthy Building Network, home in on drywall, flooring, and insulation.The authors, Perkins&Will and the Healthy Building Network, home in on drywall, flooring, and insulation.
Student Housing | Dec 5, 2023
October had fastest start ever for student housing preleasing
The student housing market for the upcoming 2024-2025 leasing season has started sooner and faster than ever.
Industry Research | Nov 28, 2023
Migration trends find top 10 states Americans are moving to
In the StorageCafe analysis of the latest migration trends, each U.S. state was looked at to see the moving patterns of people in the last few years. These are the top 10 states that people are moving to.
Market Data | Nov 27, 2023
Number of employees returning to the office varies significantly by city
While the return-to-the-office trend is felt across the country, the percentage of employees moving back to their offices varies significantly according to geography, according to Eptura’s Q3 Workplace Index.