National nonresidential construction spending grew 0.9% in November, 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 $930.1 billion for the month.
Spending was up on a monthly basis in nine of the 16 nonresidential subcategories. Private nonresidential spending was up 1.7%, while public nonresidential construction spending was down 0.1% in November.
“The average nonresidential contractor starts 2023 with considerable backlog,” said ABC Chief Economist Anirban Basu. “Not coincidentally, contractors also have significant confidence regarding current year prospects, according to ABC’s Construction Confidence Index, which indicates expectations for growth in sales and employment with margins remaining stable.
“November’s construction spending report suggests that this confidence is warranted,” said Basu. “However, there are countervailing considerations. First, growth in nonresidential construction spending in November was not especially broad. Much of the growth came from the manufacturing category, which is partially attributable to construction related to large-scale chip manufacturing facilities. The balance of growth came mostly from conservation and development, which includes flood control expenditures. Were it not for those two categories, nonresidential construction spending would have been roughly flat in November.
“Second, backlog could dry up,” said Basu. “Anecdotal evidence suggests that banks are more cautious in their lending to the commercial real estate and multifamily segments. Fears of recession this year remain pervasive in an environment characterized by high and rising interest rates. It will be interesting to see how well backlog will hold up as contractors continue to build and the economy heads toward what is likely to be a Federal Reserve-induced recession.”
Related Stories
Market Data | Jun 10, 2020
6 must reads for the AEC industry today: June 10, 2020
Singapore's newest residential district and CannonDesign unveils COVID Shield.
Market Data | Jun 9, 2020
ABC’s Construction Backlog Indicator inches higher in May; Contractor confidence continues to rebound
Nonresidential construction backlog is down 0.8 months compared to May 2019 and declined year over year in every industry.
Market Data | Jun 9, 2020
6 must reads for the AEC industry today: June 9, 2020
OSHA safety inspections fall 84% and the office isn't dead.
Market Data | Jun 8, 2020
Construction jobs rise by 464,000 jobs but remain 596,000 below recent peak
Gains in may reflect temporary support from paycheck protection program loans and easing of construction restrictions, but hobbled economy and tight state and local budgets risk future job losses.
Market Data | Jun 5, 2020
7 must reads for the AEC industry today: June 5, 2020
The world's first carbon-fiber reinforced concrete building and what will college be like in the fall?
Market Data | Jun 4, 2020
7 must reads for the AEC industry today: June 4, 2020
Construction unemployment declines in 326 of 358 metro areas and is the show over for AMC Theatres?
Market Data | Jun 3, 2020
Construction employment declines in 326 out of 358 metro areas in April
Association says new transportation proposal could help restore jobs.
Market Data | Jun 3, 2020
6 must reads for the AEC industry today: June 3, 2020
5 ways to improve cleanliness of public restrooms and office owners are in no hurry for tenants to return.
Market Data | Jun 2, 2020
Architects, health experts release strategies, tools for safely reopening buildings
AIA issues three new and enhanced tools for reducing risk of COVID-19 transmission in buildings.
Market Data | Jun 2, 2020
5 must reads for the AEC industry today: June 2, 2020
New Luxembourg office complex breaks ground and nonresidential construction spending falls.