"Today’s release helps confirm ABC’s notion that the winter decline in nonresidential construction spending was largely due to unusually harsh weather as opposed to shifting economic fundamentals.”—ABC Chief Economist Anirban Basu.
Nonresidential construction spending expanded in May for the second consecutive month (based on revised data), according to a July 1 release from the U.S. Census Bureau. Nonresidential construction spending rose 1.1 percent on a monthly basis in May and has increased 6.4 percent on a year-over-year basis. Spending for the month totaled $596.2 billion on a seasonally adjusted, annualized basis. Additionally, nonresidential construction spending for April was revised upward from $570.6 billion to $589.9 billion.
“Nonresidential construction spending is now at its highest level since October 2009, though that does not account for the cost of inflation,” said Associated Builders and Contractors (ABC) Chief Economist Anirban Basu. “Today’s release helps confirm ABC’s notion that the winter decline in nonresidential construction spending was largely due to unusually harsh weather as opposed to shifting economic fundamentals.”
“ABC’s economic forecast continues to call for ongoing healing in the industry,” said Basu. “Given recent hiccups in U.S. macroeconomic performance, as measured by gross domestic product, and public funding constraints, gradual recovery is perhaps the best the overall industry can anticipate.”
Eleven of 16 nonresidential construction subsectors posted increases in spending in May.
•Office-related construction spending grew 0.6 percent in May and is up 18.9 percent from the same time one year ago.
•Construction spending in the transportation category expanded 2.2 percent on a monthly basis and has risen 7.5 percent on a year-over-year basis.
•Religious spending grew 1.4 percent for the month, but is down 3.9 percent from the same time last year.
•Sewage and waste disposal-related construction spending gained 4 percent for the month, but has fallen 1.3 percent on an annual basis.
•Amusement and recreation-related construction spending expanded 3.1 percent on a monthly basis and is up 8.5 percent from the same time last year.
•Conservation and development-related construction spending increased 1.2 percent for the month and is up 16 percent on a yearly basis.
•Highway and street-related construction spending expanded 0.7 percent in May and is up 2.3 percent compared to the same time last year.
•Communication construction spending grew 2.3 percent for the month, but is down 1.1 percent from the same time one year ago.
•Public safety-related construction spending expanded 0.3 percent on a monthly basis, but has declined 10.9 percent on a year-over-year basis.
•Power construction spending grew 3.9 percent for the month and was 25.9 percent higher than the same time last year.
•Spending in the water supply category expanded 8.5 percent for the month and is unchanged year over year.
Spending in five nonresidential construction subsectors declined in May.
•Manufacturing-related spending fell 1.4 percent on a monthly basis, but is up 6.3 percent compared to the same time last year.
•Health care-related construction spending fell 1.6 percent for the month and is down 10.1 percent from May 2013.
•Education-related construction spending fell 0.5 percent for the month and is down 0.8 percent on a year-over-year basis.
•Commercial construction spending fell 1.1 percent in May, but is up 4.6 percent on a year-over-year basis.
•Lodging construction spending is down 1.2 percent on a monthly basis, but is up 11.4 percent on an annual basis.
To view the previous Spending report, click HERE.