National nonresidential construction spending fell 1.2% in July, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, spending totaled $809.1 billion for the month.
Of the 16 nonresidential subcategories, 10 were down on a monthly basis. Private nonresidential spending declined 1.0% while public nonresidential construction spending was down 1.3% in July.
“There are two primary countervailing forces influencing the trajectory of nonresidential construction spending,” said Basu. “The first is a force for good and involves the reopening of the economy and associated rebound in overall economic activity. Despite the lingering pandemic, third quarter GDP growth is likely to be quite strong. All things being equal, this would tend to strengthen business for contractors.
'Next year is shaping up to be an especially harsh one for many contractors, especially as some are already indicating that they are nearing the end of their backlog. The wild card, as is often the case, is Congress.'
“However, the second force at work is not benign and appears to be the stronger of the two,” said Basu. “The crisis has resulted in tighter project financing conditions, battered state and local government finances, substantial commercial vacancy and uncertainty regarding the future of key segments, such as office and lodging. And while backlog was strong at the start of the year, contractors indicate that it is now declining rapidly, in part due to abundant project cancellations.”
“Next year is shaping up to be an especially harsh one for many contractors, especially as some are already indicating that they are nearing the end of their backlog,” said Basu. “The wild card, as is often the case, is Congress. Another stimulus package could go a long way toward improving the trajectory of overall nonresidential construction spending, particularly one with a sizable infrastructure component. The upshot is that declines in nonresidential construction spending are likely even in the context of broader economic recovery.”
Related Stories
| May 1, 2013
World’s tallest children’s hospital pushes BIM to the extreme
The Building Team for the 23-story Lurie Children’s Hospital in Chicago implements an integrated BIM/VDC workflow to execute a complex vertical program.
| Apr 30, 2013
Healthcare lighting innovation: Overhead fixture uses UV to kill airborne pathogens
Designed specifically for hospitals, nursing homes, child care centers, and other healthcare facilities where infection control is a concern, the Arcalux Health Risk Management System (HRMS) is an energy-efficient lighting fixture that doubles as a germ-killing machine.
| Apr 30, 2013
First look: North America's tallest wooden building
The Wood Innovation Design Center (WIDC), Prince George, British Columbia, will exhibit wood as a sustainable building material widely availablearound the globe, and aims to improve the local lumber economy while standing as a testament to new construction possibilities.
| Apr 26, 2013
Apple scales back Campus 2 plans to reduce price tag
Apple will delay the construction of a secondary research and development building on its "spaceship" campus in an attempt to drive down the cost of developing its new headquarters.
| Apr 26, 2013
Solving the parking dilemma in U.S. cities
ArchDaily's Rory Stott yesterday posted an interesting exploration of progressive parking strategies being employed by cities and designers. The lack of curbside and lot parking exacerbates traffic congestion, discourages visitors, and leads to increased vehicles emissions.
| Apr 26, 2013
Decaying city: Exhibit demonstrates the fragility of the man-made world
Theater set designer Johanna Mårtensson built a model cityscape out of bread only to watch it decay.
| Apr 25, 2013
Colorado State University, DLR Group team to study 12 high-performance schools
DLR Group and the Institute for the Built Environment at Colorado State University have collaborated on a research project to evaluate the effect of green school design on occupants and long-term building performance.
| Apr 24, 2013
More positive momentum for Architecture Billings Index
All regions and building sectors continue to report positive business conditions
| Apr 24, 2013
North Carolina bill would ban green rating systems that put state lumber industry at disadvantage
North Carolina lawmakers have introduced state legislation that would restrict the use of national green building rating programs, including LEED, on public projects.
| Apr 24, 2013
Los Angeles may add cool roofs to its building code
Los Angeles Mayor Antonio Villaraigosa wants cool roofs added to the city’s building code. He is also asking the Department of Water and Power (LADWP) to create incentives that make it financially attractive for homeowners to install cool roofs.
