ARLINGTON, Va. — Nonresidential construction spending grew 0.2 percent in August and is up 1.3 percent on an annual basis, according to a release from the U.S. Census Bureau reported by the Associated Builders and Contractors (ABC).
August spending totaled $568.6 billion on a seasonally adjusted, annualized basis. The most recent monthly nonresidential construction spending data reveal that both public nonresidential construction spending (up 0.3 percent) and privately financed nonresidential construction projects (up 0.1 percent) saw modest gains in August. On a year-over-year basis, private nonresidential construction spending is up 4.3 percent while public nonresidential construction spending fell 1.9 percent.
“Mimicking the national economy, the nonresidential construction segment is associated with both private sector progress and public sector retrenchment,” said Anirban Basu, chief economist, ABC. “Many economists agree that were it not for statistical headwinds and related uncertainty, the U.S. economy probably would be expanding faster than 3 percent, rather than struggling to achieve 2 percent growth. Similarly, were it not for declines in public construction-dominated categories, such as education and a handful of others, nonresidential construction recovery would have been more forceful during the past year.
“Given lingering fiscal uncertainty emanating from the federal government as well as from many states, public construction is unlikely to rally any time soon. However, private construction is positioned to continue to recover in conjunction with a national economy now in its fifth year of expansion. Much of the strength in the U.S. economy relates to consumer spending. Not coincidentally, construction segments that have been leading the recovery include lodging and commercial.”
Residential construction spending increased 1.3 percent for the month and is up 18.3 percent from the same time last year. Total construction spending — which encompasses both nonresidential and residential spending — was up 0.6 percent for the month and is up 7.1 percent since August 2012.
Publication date: 1/20/2014