flexiblefullpage
billboard
interstitial1
catfish1
Currently Reading

ABC: Nonresidential construction spending down in April

Market Data

ABC: Nonresidential construction spending down in April

Lower building material prices, a sluggish U.S. economy, and hesitation among private developers all factor into the 2.1% drop.


By ABC | June 2, 2016
ABC: Nonresidential construction spending down in April

Construction in Cleveland's Public Sqaure in April 2016. Photo: Erik Drost/Creative Commons.

Nonresidential construction spending fell 2.1% in April according to analysis of U.S. Census Bureau data released by Associated Builders and Contractors (ABC). Nonresidential spending totaled $688.2 billion on a seasonally adjusted, annualized rate. 

Much like last month, the sting of a disappointing headline number was mitigated by upward revisions to the previous two months of data. March's estimate was revised from $695.7 billion to $702.6 billion, while February's estimate saw a 0.1% increase. March represents the first month in which spending exceeded $700 billion since March 2009.

"Nonresidential construction spending growth continues to struggle to maintain momentum," said ABC Chief Economist Anirban Basu. "The amount of nonresidential construction value put in place has expanded by just 2.5% over the past year, with private spending up 3.4% and public spending up just 1.4%. While many will primarily attribute this to a sluggish U.S. economy, one that has expanded by less than 1.5% during each of the last two completed calendar quarters, there are other factors at work.

"Lower materials prices are embodied in the value of completed work," said Basu. "Though commodity prices have been firming recently, commodity prices had been in decline for more than a year. Moreover, in some communities, nonresidential construction is facing severe constraints given an insufficient number of qualified workers. Both factors would tend to constrain the level of observed growth in nonresidential construction spending.

"There may also be growing skittishness among private developers, who have become increasingly concerned by possible overbuilding in commercial, office and lodging markets," warned Basu. "Both lodging and commercial construction spending dipped in April. This hesitancy is reflected in many ways, including in the Architectural Billings Index, which has struggled to consistently stand meaningfully above its threshold value of 50. Public spending also remains lackluster as many states deal with underfunded pensions and ballooning Medicaid costs."

Only five of 16 nonresidential construction sectors experienced spending increases in April on a monthly basis:

  • Religious-related spending expanded 9.6% from March 2016 and 7.3% from April 2015.
  • Spending in the public safety category grew 5.2% on a monthly basis but fell 6.2% on a yearly basis. 
  • Office-related spending expanded 1.6% for the month and 20.3% for the year. 
  • Amusement and recreation-related spending expanded 0.8% month-over-month and 8.3% year-over-year. 
  • Spending in the power category rose by 0.3% for the month and 0.6% from April 2015. 

Spending in 11 of the nonresidential construction subsectors fell in April on a monthly basis:

  • Spending in the communication category fell 7.7% from March 2016 and is down 16.4% from April 2015.
  • Highway and street-related spending fell 6.5% on a monthly basis but is up 4% on a yearly basis. 
  • Commercial-related spending dipped 3.7% for the month but is up 6.8% from April 2015. 
  • Spending in the health care category fell 3% from March 2016 and is down 0.6% from the same month one year ago.
  • Educational-related spending dropped 2.4% month-over-month but is up 5.4% year-over-year.
  • Spending in the lodging category fell 2% on a monthly basis but is up 24.6% on a yearly basis.
  • Transportation-related spending fell 1.7% since March 2016 and is down 1% from April 2015.
  • Sewage and waste disposal-related spending fell 1.4% for the month but is up 1% from April 2015. 
  • Manufacturing-related spending fell 1.4% month-over-month and 9.8% year-over-year.
  • Spending in the conservation and development category dipped 1.2% for the month and 6.5% year-over-year. 
  • Water supply-related spending fell 0.5% on a monthly basis and 6.5% on a yearly basis.

Related Stories

Mixed-Use | Jun 29, 2023

Massive work-live-play development opens in LA's new Cumulus District

VOX at Cumulus, a 14-acre work-live-play development in Los Angeles, offers 910 housing units and 100,000 sf of retail space anchored by a Whole Foods outlet. VOX, one of the largest mixed-use communities to open in the Los Angeles area, features apartments and townhomes with more than one dozen floorplans.

School Construction | Jun 29, 2023

K-12 school construction: 5 ways strong community relations can lead to success

When constructing a K-12 school, building positive relationships with the community—including students, parents, school staff and residents—is critical to the success of the project. Here are five ways Skanska puts the community first when building K-12 schools in the Pacific Northwest.

Multifamily Housing | Jun 28, 2023

Sutton Tower, an 80-story multifamily development, completes construction in Manhattan’s Midtown East

In Manhattan’s Midtown East, the construction of Sutton Tower, an 80-story residential building, has been completed. Located in the Sutton Place neighborhood, the tower offers 120 for-sale residences, with the first move-ins scheduled for this summer. The project was designed by Thomas Juul-Hansen and developed by Gamma Real Estate and JVP Management. Lendlease, the general contractor, started construction in 2018.

Apartments | Jun 27, 2023

Average U.S. apartment rent reached all-time high in May, at $1,716

Multifamily rents continued to increase through the first half of 2023, despite challenges for the sector and continuing economic uncertainty. But job growth has remained robust and new households keep forming, creating apartment demand and ongoing rent growth. The average U.S. apartment rent reached an all-time high of $1,716 in May.

Apartments | Jun 27, 2023

Dallas high-rise multifamily tower is first in state to receive WELL Gold certification

HALL Arts Residences, 28-story luxury residential high-rise in the Dallas Arts District, recently became the first high-rise multifamily tower in Texas to receive WELL Gold Certification, a designation issued by the International WELL Building Institute. The HKS-designed condominium tower was designed with numerous wellness details.

University Buildings | Jun 26, 2023

Addition by subtraction: The value of open space on higher education campuses

Creating a meaningful academic and student life experience on university and college campuses does not always mean adding a new building. A new or resurrected campus quad, recreational fields, gardens, and other greenspaces can tie a campus together, writes Sean Rosebrugh, AIA, LEED AP, HMC Architects' Higher Education Practice Leader.

Standards | Jun 26, 2023

New Wi-Fi standard boosts indoor navigation, tracking accuracy in buildings

The recently released Wi-Fi standard, IEEE 802.11az enables more refined and accurate indoor location capabilities. As technology manufacturers incorporate the new standard in various devices, it will enable buildings, including malls, arenas, and stadiums, to provide new wayfinding and tracking features.

Contractors | Jun 26, 2023

Most top U.S. contractors rarely deliver projects on time: new study

About 63% of leading U.S. contractors are delivering projects out of schedule, according to a survey of over 300 C-suite executives and owners in the construction industry by XYZ Reality. The study implies that the industry is struggling with significant backlogs due, in part, to avoidable defects, scan, and rework. 

Green | Jun 26, 2023

Federal government will spend $30 million on novel green building technologies

The U.S. General Services Administration (GSA), and the U.S. Department of Energy (DOE) will invest $30 million from the Inflation Reduction Act to increase the sustainability of federal buildings by testing novel technologies. The vehicle for that effort, the Green Proving Ground (GPG) program, will invest in American-made technologies to help increase federal electric vehicle supply equipment, protect air quality, reduce climate pollution, and enhance building performance.

Office Buildings | Jun 26, 2023

Electric vehicle chargers are top priority for corporate office renters

Businesses that rent office space view electric vehicle (EV) charging stations as a top priority. More than 40% of companies in the Americas and EMEA (Europe, the Middle East and Africa) are looking to include EV charging stations in future leases, according to JLL’s 2023 Responsible Real Estate study.

boombox1
boombox2
native1

More In Category




halfpage1

Most Popular Content

  1. 2021 Giants 400 Report
  2. Top 150 Architecture Firms for 2019
  3. 13 projects that represent the future of affordable housing
  4. Sagrada Familia completion date pushed back due to coronavirus
  5. Top 160 Architecture Firms 2021