Nonresidential Construction Momentum Expected to Continue
Spending did dip in November due a decline in public-sector activity.
According to an Associated Builders and Contractors analysis of data published by the U.S. Census bureau, national nonresidential construction spending decreased 0.1% in November. Nonresidential spending totaled $1.143 trillion, on a seasonally adjusted annualized basis.
On a monthly basis, spending was down in 11 of the 16 nonresidential subcategories.
Private nonresidential spending increased 0.2%. At the same time, nonresidential construction spending fell 0.6% in November.
According to ABC Chief Economist Anirban Basu, the nonresidential construction spending dip in November was due to a 0.6% decline in public-sector activity.
“Spending is up an impressive 18.1% over the past year, with the gains evenly distributed between the public and private sectors, and currently sits just below the all-time high established in October,” said Basu.
According to Basu, despite the monthly setback in November, manufacturing-related construction continues to surge, accounting for approximately 45% of the year-over-year increase in nonresidential spending.
In addition, Basu reports impressive growth in 2023 in other segments mostly privately funded. Educational, health care, and power construction are all up significantly over the past 12 months. At the same time, some publicly financed segments, such as highway and street and sewage and waste disposal, have posted strong year-over-year performances, too.
In fact, according to ABC’s Construction Confidence Index, only 24% of contractors expect their sales to decline over the next six months. As a result, the industry appears set to continue this momentum well into the new year.