National nonresidential construction spending declined 1.3% 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 $789.5 billion for the month.
On a monthly basis, spending was down in 13 of 16 nonresidential subcategories. Private nonresidential spending was down 1.0%, while public nonresidential construction spending fell 1.8% in February. Nonresidential construction spending has declined by 6.1% from the same time last year.
“We remain in the midst of the COVID-19 pandemic, which has shattered commercial real estate fundamentals,” said ABC Chief Economist Anirban Basu. “This too shall pass, but there continues to be downward pressure on nonresidential construction activity, and that was apparent in February, when weakness in spending was apparent in private and public segments alike.
“But past is not prologue in this instance,” said Basu. “America is about to experience a massive resurgence in economic growth as vaccinations proceed. Many ABC members report that backlog has already been climbing as projects that had been postponed earlier in the crisis come back to life. While some residual weakness may persist in the next few months, nonresidential construction spending is poised to stabilize during the summer and enter 2022 with substantial momentum, though some private construction segments will continue to lag.
“Consequently, the nature of the challenges facing contractors will shift dramatically during the months ahead,” said Basu. “While many contractors have indicated that demand for construction services has been among their leading sources of concern during the pandemic, by the end of this year, the greatest challenge for many will be securing a sufficient workforce with which to compete for and complete projects. This will likely be even more of an issue in 2022 and 2023 as the pace of economic recovery progresses.”
Related Stories
Market Data | Nov 2, 2018
Nonresidential spending retains momentum in September, up 8.9% year over year
Total nonresidential spending stood at $767.1 billion on a seasonally adjusted, annualized rate in September.
Market Data | Oct 30, 2018
Construction projects planned and ongoing by world’s megacities valued at $4.2trn
The report states that Dubai tops the list with total project values amounting to US$374.2bn.
Market Data | Oct 26, 2018
Nonresidential fixed investment returns to earth in Q3
Despite the broader economic growth, fixed investment inched 0.3% lower in the third quarter.
Market Data | Oct 24, 2018
Architecture firm billings slow but remain positive in September
Billings growth slows but is stable across sectors.
Market Data | Oct 19, 2018
New York’s five-year construction spending boom could be slowing over the next two years
Nonresidential building could still add more than 90 million sf through 2020.
Market Data | Oct 8, 2018
Global construction set to rise to US$12.9 trillion by 2022, driven by Asia Pacific, Africa and the Middle East
The pace of global construction growth is set to improve slightly to 3.7% between 2019 and 2020.
Market Data | Sep 25, 2018
Contractors remain upbeat in Q2, according to ABC’s latest Construction Confidence Index
More than three in four construction firms expect that sales will continue to rise over the next six months, while three in five expect higher profit margins.
Market Data | Sep 24, 2018
Hotel construction pipeline reaches record highs
There are 5,988 projects/1,133,017 rooms currently under construction worldwide.
Market Data | Sep 21, 2018
JLL fit out report portrays a hot but tenant-favorable office market
This year’s analysis draws from 2,800 projects.
Market Data | Sep 21, 2018
Mid-year forecast: No end in sight for growth cycle
The AIA Consensus Construction Forecast is projecting 4.7% growth in nonresidential construction spending in 2018.
