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. On a seasonally adjusted annualized basis, nonresidential spending totaled $829.4 billion for the month.
Spending was down on a monthly basis in eight of the 16 nonresidential subcategories. Both private and public nonresidential spending fell by 0.5% in June.
“There continues to be significant downward pressure on nonresidential construction spending volumes, and that is likely to intensify going forward,” said ABC Chief Economist Anirban Basu. “To date, construction spending measured in dollars has been propped up by elevated construction delivery costs, including higher materials prices and rapidly rising wages. Despite those inflationary pressures, aggregate nonresidential construction spending has failed to recover to pre-pandemic levels in nominal terms. The situation looks even worse when adjusting for inflation.
“The primary issue is that those high construction delivery charges are inducing a significant fraction of project owners to reconsider start dates,” said Basu. “True, backlog remains elevated, according to ABC’s Construction Backlog Indicator, but this may be because it is taking longer to complete projects. Additional project delays and cancellations are likely as borrowing costs continue to ratchet higher for those who purchase construction services and as the risk of recession increases. For now, many contractors remain busy and continue to operate at or near capacity. Whether that will continue for another 12 to 18 months remains an unanswered question.”
Related Stories
Market Data | Feb 2, 2022
Construction spending increased in December for the month and the year
Nonresidential and public construction lagged residential sector.
Market Data | Jan 31, 2022
Canada's hotel construction pipeline ends 2021 with 262 projects and 35,325 rooms
At the close of 2021, projects under construction stand at 62 projects/8,100 rooms.
Market Data | Jan 27, 2022
Record high counts for franchise companies in the early planning stage at the end of Q4'21
Through year-end 2021, Marriott, Hilton, and IHG branded hotels represented 585 new hotel openings with 73,415 rooms.
Market Data | Jan 27, 2022
Dallas leads as the top market by project count in the U.S. hotel construction pipeline at year-end 2021
The market with the greatest number of projects already in the ground, at the end of the fourth quarter, is New York with 90 projects/14,513 rooms.
Market Data | Jan 26, 2022
2022 construction forecast: Healthcare, retail, industrial sectors to lead ‘healthy rebound’ for nonresidential construction
A panel of construction industry economists forecasts 5.4 percent growth for the nonresidential building sector in 2022, and a 6.1 percent bump in 2023.
Market Data | Jan 24, 2022
U.S. hotel construction pipeline stands at 4,814 projects/581,953 rooms at year-end 2021
Projects scheduled to start construction in the next 12 months stand at 1,821 projects/210,890 rooms at the end of the fourth quarter.
Market Data | Jan 19, 2022
Architecture firms end 2021 on a strong note
December’s Architectural Billings Index (ABI) score of 52.0 was an increase from 51.0 in November.
Market Data | Jan 13, 2022
Materials prices soar 20% in 2021 despite moderating in December
Most contractors in association survey list costs as top concern in 2022.
Market Data | Jan 12, 2022
Construction firms forsee growing demand for most types of projects
Seventy-four percent of firms plan to hire in 2022 despite supply-chain and labor challenges.
Market Data | Jan 7, 2022
Construction adds 22,000 jobs in December
Jobless rate falls to 5% as ongoing nonresidential recovery offsets rare dip in residential total.
