National nonresidential construction spending decreased 0.2% in May, 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 $1.06 trillion.
Spending declined on a monthly basis in nine of the 16 nonresidential subcategories. Private nonresidential spending fell 0.3%, while public nonresidential construction spending increased 0.1% in May.
“Nonresidential construction spending declined in May, ending a streak of 11 consecutive monthly increases,” said ABC Chief Economist Anirban Basu. “While spending is up more than 17% over that span, manufacturing-related construction has accounted for the majority of that increase. Excluding the manufacturing segment, nonresidential construction spending is barely outpacing inflation, up just 6% over the past year.
“Contractors remain relatively upbeat, according to ABC’s Construction Confidence Index, and ongoing strength in manufacturing and publicly financed segments justifies that confidence,” said Basu. “Unfortunately, conditions may prove challenging in other segments over the next few quarters. Interest rates remain elevated and are likely to rise at least once more over the second half of 2023, exacerbating already tight credit conditions and ultimately limiting construction activity.”
Related Stories
Market Data | Sep 2, 2020
Coronavirus has caused significant construction project delays and cancellations
Yet demand for skilled labor is high, new survey finds.
Market Data | Sep 2, 2020
5 must reads for the AEC industry today: September 2, 2020
Precast concrete tower honors United AIrlines Flight 93 victims and public and private nonresidential construction spending slumps.
Market Data | Sep 2, 2020
Public and private nonresidential construction spending slumps in July
Industry employment declines from July 2019 in two-thirds of metros.
Market Data | Aug 31, 2020
5 must reads for the AEC industry today: August 31, 2020
The world's first LEED Platinum integrated campus and reopening campus performance arts centers.
Market Data | Aug 21, 2020
5 must reads for the AEC industry today: August 21, 2020
Student housing in the COVID-19 era and wariness of elevators may stymie office reopening.
Market Data | Aug 20, 2020
6 must reads for the AEC industry today: August 20, 2020
Japan takes on the public restroom and a look at the evolution of retail.
Market Data | Aug 19, 2020
6 must reads for the AEC industry today: August 19, 2020
July architectural billings remained stalled and Florida becomes third state to adopt concrete repair code.
Market Data | Aug 18, 2020
July architectural billings remained stalled
Clients showed reluctance to sign contracts for new design projects during July.
Market Data | Aug 18, 2020
Nonresidential construction industry won’t start growing again until next year’s third quarter
But labor and materials costs are already coming down, according to latest JLL report.
Market Data | Aug 18, 2020
6 must reads for the AEC industry today: August 18, 2020
The world's first AI-driven facade system and LA's Greek Theatre restoriation completes.
