Following the announcement by the US Bureau of Statistics that construction spending fell by 2.1% in May from a month earlier:
Dariana Tani, Economist at GlobalData, a leading data and analytics company, offers her view on the situation:
“May’s construction spending data shows the ongoing weakness in the US construction industry amid the COVID-19 pandemic. Overall, construction spending was driven down by a decline in spending on private construction projects offsetting an increase in spending on public projects.
“GlobalData expects the US construction industry to contract by -6.5% in 2020 and -2% in 2021, down from the previous growth forecast of 0.6% and 1.4% before the COVID-19 pandemic started. Sectors such as commercial, residential and industrial are anticipated to be the hardest hit amid the collapse in business and consumer confidence, while sectors such as institutional and infrastructure will also be affected although to a lesser extent.
“As Congress and the White House contemplate the next phase of yet another unprecedented government response to limit the economic impact of the COVID-19 outbreak, Democrats and President Donald Trump are increasingly raising the prospects of passing a multi-trillion dollar infrastructure plan that could generate millions of jobs and stimulate the economy and the construction industry. However, key risks remain. With the number of new COVID-19 cases surging across the country, as many states are reopening their economies, the construction industry is expected to continue to decline over the coming months.
“A second wave in the second half of 2020 and the potential increase of caseloads in underserved communities could put at risk the recovery of the labor market and increase the risk that the pandemic could result in long-lasting damage to the economy as new lockdown restrictions will have to be put in place again. Furthermore, heightening political uncertainty over the upcoming presidential election, lower oil prices, and financial volatility are other factors that could undermine confidence.”
Related Stories
Retail Centers | Apr 4, 2024
Retail design trends: Consumers are looking for wellness in where they shop
Consumers are making lifestyle choices with wellness in mind, which ignites in them a feeling of purpose and a sense of motivation. That’s the conclusion that the architecture and design firm MG2 draws from a survey of 1,182 U.S. adult consumers the firm conducted last December about retail design and what consumers want in healthier shopping experiences.
Market Data | Apr 1, 2024
Nonresidential construction spending dips 1.0% in February, reaches $1.179 trillion
National nonresidential construction spending declined 1.0% in February, 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 $1.179 trillion.
Market Data | Mar 26, 2024
Architecture firm billings see modest easing in February
Architecture firm billings continued to decline in February, with an AIA/Deltek Architecture Billings Index (ABI) score of 49.5 for the month. However, February’s score marks the most modest easing in billings since July 2023 and suggests that the recent slowdown may be receding.
K-12 Schools | Mar 18, 2024
New study shows connections between K-12 school modernizations, improved test scores, graduation rates
Conducted by Drexel University in conjunction with Perkins Eastman, the research study reveals K-12 school modernizations significantly impact key educational indicators, including test scores, graduation rates, and enrollment over time.
MFPRO+ News | Mar 16, 2024
Multifamily rents stable heading into spring 2024
National asking multifamily rents posted their first increase in over seven months in February. The average U.S. asking rent rose $1 to $1,713 in February 2024, up 0.6% year-over-year.
Market Data | Mar 14, 2024
Download BD+C's March 2024 Market Intelligence Report
U.S. construction spending on buildings-related work rose 1.4% in January, but project teams continue to face headwinds related to inflation, interest rates, and supply chain issues, according to Building Design+Construction's March 2024 Market Intelligence Report (free PDF download).
Contractors | Mar 12, 2024
The average U.S. contractor has 8.1 months worth of construction work in the pipeline, as of February 2024
Associated Builders and Contractors reported that its Construction Backlog Indicator declined to 8.1 months in February, according to an ABC member survey conducted Feb. 20 to March 5. The reading is down 1.1 months from February 2023.
Market Data | Mar 6, 2024
Nonresidential construction spending slips 0.4% in January
National nonresidential construction spending decreased 0.4% in January, 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 $1.190 trillion.
Multifamily Housing | Mar 4, 2024
Single-family rentals continue to grow in BTR communities
Single-family rentals are continuing to grow in built-to-rent communities. Both rent and occupancy growth have been strong in recent months while remaining a financially viable option for renters.
MFPRO+ News | Mar 2, 2024
Job gains boost Yardi Matrix National Rent Forecast for 2024
Multifamily asking rents broke the five-month streak of sequential average declines in January, rising 0.07 percent, shows a new special report from Yardi Matrix.