Despite Monthly Dip, September’s Nonresidential Construction Spending Soars Over 2017
Although nonresidential construction spending dipped slightly in September, Associated Builders and Contractors (ABC) isn't too concerned as yearly data shows significant improvement over September 2017. According to ABC's analysis of U.S. Census Bureau data, the country's nonresidential construction spending reached almost 9% higher than last year's numbers, particularly in water supply and conservation and development construction.
Spending fell a mere 0.3% between August and September, with noticeable declines in religious, public safety and power construction. However, the only nonresidential construction spending to decline year-over-year were in religious and communication. Total spending hit $767.1 billion, much higher than the bureau's August estimate of $762.7 billion. Private nonresidential spending increased minimally by 0.1%; however, public spending faltered with a 0.8% decrease.
"Unlike previous instances of rapid construction growth, this one is led by a neatly balanced combination of private and public spending growth," said ABC Chief Economist Anirban Basu in a statement. "Among the leading sources of spending growth over the past year are water supply, transportation, lodging and office construction. This is not only consistent with an economy that continues to perform splendidly along multiple dimensions, but also with significantly improved state and local government finances, which has helped to support greater levels of infrastructure spending."
Basu noted that contractors will likely "remain busy" for the remainder of 2018 and into 2019, the only challenges being rising workforce and input costs.
—Andrew Michaels, editorial associate