Nonresidential construction spending remained unchanged in April on a monthly basis, according to an Associated Builders and Contractors (ABC) analysis of U.S. Census Bureau data released today. However, year-over-year spending was up a sturdy 6.1%.
Private sector spending increased 0.8% on a monthly basis and is up 5.3% from a year ago. Public sector spending fell 1.4% in April, but is up 7.3% year over year.
“Between today’s employment and construction spending reports, it is clear that the economy continues to exhibit strong momentum and abundant confidence,” said ABC Chief Economist Anirban Basu. “It’s important to remember that the construction spending data generally have failed to display as much economic strength as many other indicators. Even the most recent monthly readings on construction spending were unspectacular, but the year-over-year numbers are consistent with ongoing economic and industry progress.
“Perhaps most encouraging is the growing strength of the public categories,” said Basu. “For many years, public construction spending languished even as private categories demonstrated growing vigor. With the dramatic improvement in state and local government finances in many communities in recent years, there is greater capacity to invest in infrastructure. Not coincidentally, construction spending in the transportation category rose 22% during the past year. Spending in the public safety category, which includes spending on police and fire stations, is up by nearly 17%.
“As always, there is a need to pay attention to any clouds forming on the horizon,” said Basu. “Inflationary pressures continue to build, with tariffs on steel and aluminum likely to accelerate construction materials price appreciation during the next several months. Interest rates are expected to head higher, though perhaps only in fits and starts. Wage pressures also continue to build. The implication is that the cost of financing construction projects is on the rise. Should those costs rise too quickly, the momentum presently observable in nonresidential construction spending and employment data could quickly dissipate.”
Related Stories
Market Data | May 2, 2018
Construction employment increases in 245 metro areas between March 2017 & 2018, as trade fights & infrastructure funding shortfalls loom
Houston-The Woodlands-Sugar Land, Texas and Weirton-Steubenville, W.Va.-Ohio experience largest year-over-year gains; Baton Rouge, La. and Auburn-Opelika, Ala. have biggest annual declines.
Market Data | May 2, 2018
Nonresidential Construction down in March, private sector falters, public sector unchanged
February’s spending estimate was revised roughly $10 billion higher.
Market Data | Apr 30, 2018
Outlook mixed for renewable energy installations in Middle East and Africa region
Several major MEA countries are actively supporting the growth of renewable energy.
Market Data | Apr 12, 2018
Construction costs climb in March as wide range of input costs jump
Association officials urge Trump administration, congress to fund infrastructure adequately as better way to stimulate demand than tariffs that impose steep costs on contractors and project owners.
Market Data | Apr 9, 2018
Construction employers add 228,000 jobs over the year despite dip in March
Average hourly earnings increase to $29.43 in construction, topping private sector by nearly 10%; Association officials urge updating and better funding programs to train workers for construction jobs.
Market Data | Apr 4, 2018
Construction employment increases in 257 metro areas between February 2017 & 2018 as construction firms continue to expand amid strong demand
Riverside-San Bernardino-Ontario, Calif. and Merced, Calif. experience largest year-over-year gains; Baton Rouge, La. and Auburn-Opelika, Ala. have biggest annual declines in construction employment.
Market Data | Apr 2, 2018
Construction spending in February inches up from January
Association officials urge federal, state and local officials to work quickly to put recently enacted funding increases to work to improve aging and over-burdened infrastructure, offset public-sector spending drops.
Market Data | Mar 29, 2018
AIA and the University of Minnesota partner to develop Guides for Equitable Practice
The Guides for Equitable Practice will be developed and implemented in three phase.
Market Data | Mar 22, 2018
Architecture billings continue to hold positive in 2018
Billings particularly strong at firms in the West and Midwest regions.
Market Data | Mar 21, 2018
Construction employment increases in 248 metro areas as new metal tariffs threaten future sector job gains
Riverside-San Bernardino-Ontario, Calif., and Merced, Calif., experience largest year-over-year gains; Baton Rouge, La., and Auburn-Opelika, Ala., have biggest annual declines in construction employment.
