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
Green | Jan 17, 2023
Top 10 U.S. states for green building in 2022
The U.S. Green Building Council (USGBC) released its annual ranking of U.S. states leading the way on green building, with Massachusetts topping the list. The USGBC ranking is based on LEED-certified gross square footage per capita over the past year.
AEC Tech Innovation | Jan 14, 2023
CES recognizes a Dutch firm’s wearable technology for construction management
The firm’s TokenMe product offers construction managers a real-time crowd- and asset-tracking solution via low-power, location-aware radio and RFID tags and multiple sensors through which data are processed with cloud-based artificial intelligence.
Market Data | Jan 10, 2023
Construction backlogs at highest level since Q2 2019, says ABC
Associated Builders and Contractors reports today that its Construction Backlog Indicator remained unchanged at 9.2 months in December 2022, according to an ABC member survey conducted Dec. 20, 2022, to Jan. 5, 2023. The reading is one month higher than in December 2021.
Religious Facilities | Jan 9, 2023
Santiago Calatrava-designed St. Nicholas Greek Orthodox Church opens in New York
In December, New York saw the reopening of the new St. Nicholas Greek Orthodox Church and National Shrine—the only religious structure destroyed on 9/11. Renowned architect and engineer Santiago Calatrava designed St. Nicholas Church to address the traditional Greek Orthodox liturgy while honoring the Church’s connection with the World Trade Center Memorial site.
Sustainability | Jan 9, 2023
Innovative solutions emerge to address New York’s new greenhouse gas law
New York City’s Local Law 97, an ambitious climate plan that includes fines for owners of large buildings that don’t significantly reduce carbon emissions, has spawned innovations to address the law’s provisions.
Fire and Life Safety | Jan 9, 2023
Why lithium-ion batteries pose fire safety concerns for buildings
Lithium-ion batteries have become the dominant technology in phones, laptops, scooters, electric bikes, electric vehicles, and large-scale battery energy storage facilities. Here’s what you need to know about the fire safety concerns they pose for building owners and occupants.
Market Data | Jan 6, 2023
Nonresidential construction spending rises in November 2022
Spending on nonresidential construction work in the U.S. was up 0.9% in November versus the previous month, and 11.8% versus the previous year, according to the U.S. Census Bureau.
Industry Research | Dec 28, 2022
Following a strong year, design and construction firms view 2023 cautiously
The economy and inflation are the biggest concerns for U.S. architecture, construction, and engineering firms in 2023, according to a recent survey of AEC professionals by the editors of Building Design+Construction.
Contractors | Dec 27, 2022
McHugh Construction, headquartered in Chicago, celebrates its 125th anniversary
McHugh Construction, Chicago, celebrates its 125th anniversary, December 8, 2022.
University Buildings | Dec 22, 2022
Loyola Marymount University completes a new home for its acclaimed School of Film and Television
California’s Loyola Marymount University (LMU) has completed two new buildings for arts and media education at its Westchester campus. Designed by Skidmore, Owings & Merrill (SOM), the Howard B. Fitzpatrick Pavilion is the new home of the undergraduate School of Film and Television, which is consistently ranked among the nation’s top 10 film schools. Also designed by SOM, the open-air Drollinger Family Stage is an outdoor lecture and performance space.
