Nonresidential Construction Spending Continues to Increase, Private Looks Unstable
July 3, 2018
The demand for single-family homes remains high with nonresidential construction spending also on the increase. Associated Builders and Contractors (ABC) found nonresidential construction spending rose 0.1% from April to May, seeing a total increase of 3% from last year.
Despite this increase for the public sector, the private sector saw a dip of 0.3% in May. The private sector still saw a small increase of 1.8% for the year, even with the setback from April to May. Economic expansion and state policymakers likely contributed to the public increase, ABC Chief Economist Anirban Basu speculates.
Throughout the past 10 years, the economy has been expanding in both the local and state government, allowing for more money to be spent on more projects. Similarly, 31 states expanded transportation funding, with 24 taxing gas prices for the public sector.
Overseas trade wars and tariffs likely contributed to the fall in the private sector, yet the overall increase from last year remains bewildering still. With uncertainty in the market, those working on private projects need to remain cautious while international politics continue to disrupt the system. The next few quarters, Basu said, will likely be much different for the private sector.
—Christie Citranglo, editorial associate
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