The Marcum Commercial Construction Index highlights the continued spending weakness in nonresidential construction during the first nine months of the year and points to a significant anticipated change beginning in 2017. The change is being attributed to the major infrastructure-led stimulus package expected from the new Presidential administration. The national Construction Industry Practice group of Marcum LLP, a top national accounting and advisory firm, produces the quarterly index.
Overall nonresidential construction spending in September totaled $690.5 billion, down a slight 0.7 percent from a year earlier. Of the category’s 16 subsectors, bright spots included Office-related spending, which registered a whopping 23% gain to $70.7 billion; Lodging, up 20% year-over-year to $28.8 billion; Commercial construction, with a 6% gain to $71.7 billion; Amusement & Recreation, up 3.5% to $21.4 billion; and Educational construction, at $87.1 billion, a 3.3% percent increase.
The remaining 11 nonresidential subsectors all recorded fall-offs for the month, with the greatest declines in Sewage & Waste Disposal (-18.8%), Water Supply (-13.7%), Communication (-12.6%) and Transportation (-11.3%).
“Most construction firms report intense difficulty securing electricians, heating/cooling professionals, welders and carpenters, among others,” says Anirban Basu, Marcum’s Chief Construction Economist, in a press release. The construction worker unemployment rate in October was less than half of what it was five years ago, down to 5.7 % from 13.7 % in the same month of 2011. This compares to a national unemployment rate of 4.9% at the end of the 2016 third quarter.
Looking ahead, the Marcum report predicts that a stimulus package will put pressure on wages and inflation and lead to higher interest rates, which in turn will eventually hurt construction spending. “After a period of relatively intense construction spending due in part to a stimulus package, the nonresidential sector could face a sharp slowdown in construction spending thereafter,” it states.
For the complete Marcum Commercial Construction Index, visit www.marcumllp.com/industries/construction.
Related Stories
Market Data | Nov 15, 2017
Architecture Billings bounce back
Business conditions remain uneven across regions.
Market Data | Nov 14, 2017
U.S. construction starts had three consecutive quarters of positive growth in 2017
ConstructConnect’s quarterly report shows the most significant annual growth in the civil engineering and residential sectors.
Market Data | Nov 3, 2017
New construction starts in 2018 to increase 3% to $765 billion: Dodge report
Dodge Outlook Report predicts deceleration but still growth, reflecting a mixed pattern by project type.
Market Data | Nov 2, 2017
Construction spending up in September; Down on a YOY basis
Nonresidential construction spending is down 2.9% on a year-over-year basis.
Sponsored | Industry Research | Oct 26, 2017
Get clients to pay you faster with these five tips
Here are 5 ways to avoid a cash crunch by doing your part to help clients make their payments on time.
Market Data | Oct 19, 2017
Architecture Billings Index backslides slightly
Business conditions easing in the West.
Industry Research | Oct 9, 2017
AEC website design trends in 2017 – Planning for 2018
A website that’s behind the times is hurting your business.
Industry Research | Oct 3, 2017
Nonresidential construction spending stabilizes in August
Spending on nonresidential construction services is still down on a YOY basis.
Market Data | Sep 21, 2017
Architecture Billings Index continues growth streak
Design services remain in high demand across all regions and in all major sectors.
Market Data | Sep 21, 2017
How brand research delivers competitive advantage
Brand research is a process that firms can use to measure their reputation and visibility in the marketplace.
