flexiblefullpage
billboard
interstitial1
catfish1
Currently Reading

Nonresidential spending rises modestly in October

Market Data

Nonresidential spending rises modestly in October

Thirteen out of 16 subsectors are associated with year-over-year increases.


By ABC | December 4, 2018

National nonresidential spending increased 0.1% in October, according to an Associated Builders and Contractors analysis of U.S. Census Bureau data released today. Total nonresidential spending for the month stood at $763.8 billion on a seasonally adjusted annualized rate, which represents a 7.3% increase over the same time last year. 

Thirteen out of 16 subsectors are associated with year-over-year increases, with the exceptions being religious (-9.1%), communication (-4.7%), and health care (-1%). Water supply (+23%), lodging (+18.9%) and amusement and recreation (+16.2%) have generated the largest increases among nonresidential construction segments over the past 12 months.

“It is remarkable that the construction spending cycle remains firmly in place despite worker shortages, tariffs, rising materials prices, financial market volatility, more restrictive monetary policy, evidence of a slowing global economy and an abundance of political controversies,” said ABC Chief Economic Anirban Basu. “With backlog still elevated, nonresidential construction spending will enter 2019 with plentiful momentum. 

“It is true that not all construction spending segments have participated in the industry’s recovery. However, the number of segments experiencing negative spending growth is small and the expectation is that a turnaround in spending is likely in at least one of these categories,” said Basu. “The religious category (-9.1% year-over-year) represents less than 1% of total nonresidential construction spending. Demographic forces and a strong economy should translate into growing demand for healthcare services, which will eventually trigger more construction in the health care category (-1%), including in the form of outpatient medical centers. 

“While there will always be reasons to fret about the economic outlook, 2018 will go down as a fine year for the U.S. economy and for the nation’s nonresidential construction sector,” said Basu. “That said, while demand for construction services remained strong throughout the year, many contractors indicate that profit margins are under pressure. Given the ongoing dearth of available, skilled construction workers, that is likely to continue into 2019. However, materials price dynamics could be far different given a slowing global economy and expectations for a strong U.S. dollar next year.”

 

*Correction: This press release originally classified data centers as a component of the communications category. Data centers are instead a component of the office category.

 



Related Stories

Market Data | Sep 19, 2018

August architecture firm billings rebound as building investment spurt continues

Southern region, multifamily residential sector lead growth.

Market Data | Sep 18, 2018

Altus Group report reveals shifts in trade policy, technology, and financing are disrupting global real estate development industry

International trade uncertainty, widespread construction skills shortage creating perfect storm for escalating project costs; property development leaders split on potential impact of emerging technologies.

Sponsored | Market Data | Sep 17, 2018

Construction Contract Issues?

Market Data | Sep 17, 2018

ABC’s Construction Backlog Indicator hits a new high in second quarter of 2018

Backlog is up 12.2% from the first quarter and 14% compared to the same time last year.

Market Data | Sep 12, 2018

Construction material prices fall in August

Softwood lumber prices plummeted 9.6% in August yet are up 5% on a yearly basis (down from a 19.5% increase year-over-year in July).

Market Data | Sep 7, 2018

Safety risks in commercial construction industry exacerbated by workforce shortages

The report revealed 88% of contractors expect to feel at least a moderate impact from the workforce shortages in the next three years.

Market Data | Sep 5, 2018

Public nonresidential construction up in July

Private nonresidential spending fell 1% in July, while public nonresidential spending expanded 0.7%.

Market Data | Aug 30, 2018

Construction in ASEAN region to grow by over 6% annually over next five years

Although there are disparities in the pace of growth in construction output among the ASEAN member states, the region’s construction industry as a whole will grow by 6.1% on an annual average basis in the next five years.

Market Data | Aug 22, 2018

July architecture firm billings remain positive despite growth slowing

Architecture firms located in the South remain especially strong.

Market Data | Aug 15, 2018

National asking rents for office space rise again

The rise in rental rates marks the 21st consecutive quarterly increase.

boombox1
boombox2
native1

More In Category




halfpage1

Most Popular Content

  1. 2021 Giants 400 Report
  2. Top 150 Architecture Firms for 2019
  3. 13 projects that represent the future of affordable housing
  4. Sagrada Familia completion date pushed back due to coronavirus
  5. Top 160 Architecture Firms 2021