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 | Apr 9, 2020
7 must reads for the AEC industry today: April 9, 2020
Urine could be the key to building in outer space and how to turn a high school into a patient care center in just over two weeks.
Market Data | Apr 8, 2020
6 must reads for the AEC industry today: April 8, 2020
Stantec discusses how hospitals can adapt buildings to address worst-case scenarios and FXCollaborative Architects tells us why cities will survive the pandemic.
Market Data | Apr 7, 2020
7 must reads for the AEC industry today: April 7, 2020
Leo A Daly's Hotel2Hospital prototype takes shape, while the number of delayed projects reaches 2,550 in the U.S. amid coronavirus pandemic.
Market Data | Apr 3, 2020
COVID-19 cuts nonresidential construction employment in March
The construction unemployment rate was 6.9% in March, up 1.7 percentage points from the same time one year ago.
Market Data | Apr 1, 2020
February’s construction spending decline indicates what’s to come
Private nonresidential spending declined 2% on a monthly basis and is down 0.7% compared to February 2019.
Market Data | Mar 26, 2020
Architects taking action to support COVID-19 response
New AIA task force will offer insights for adapting buildings into healthcare facilities.
Market Data | Mar 26, 2020
Senate coronavirus relief bill's tax and lending provisions will help construction firms, but industry needs additional measures
Construction officials say measure will help firms cope with immediate cash flow crunch, but industry needs compensation for losses.
Market Data | Mar 25, 2020
Engineering and construction materials prices fall for first time in 40 months on coronavirus impacts, IHS Markit says
Survey respondents reported falling prices for five out of the 12 components within the materials and equipment sub-index.
Market Data | Mar 23, 2020
Coronavirus will reshape UAE construction
The impact of the virus has been felt in the UAE, where precautionary measures have been implemented to combat the spread of the virus through social distancing.
