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Nonresidential construction spending ticks up slightly following February decline

2024-05-01T15:40:00-04:00

An analysis of U.S. Census Bureau data from the Associated Builders and Contractors (ABC) has shown nonresidential construction spending to have increased moderately by 0.2% in March. It follows February's decline of 1.0%. On a seasonally adjusted annualized basis, nonresidential spending now totals $1.19 trillion.

Spending was up in 10 of the 16 nonresidential subcategories on a monthly basis. Private nonresidential spending increased 0.2%, while public nonresidential construction spending expanded by 0.8%. The market for residential construction, conversely, was shown to have decreased by 0.7% over February.

"Nonresidential construction spending rebounded in March, ending a streak of two straight monthly declines," ABC's Chief Economist Anirban Basu said. "The increase was entirely due to increased public construction spending; private sector nonresidential spending dipped slightly lower in March. Despite wavering over the first three months of 2024, nonresidential spending is now...

Construction input prices drop again for December, driven by declines in all sectors

2024-01-16T14:43:00-05:00

The latest Associated Builders and Contractors (ABC) construction input price analysis for the month of December has registered a 0.6% decrease over November’s trend-reversing totals. Nonresidential construction input prices were down another 0.4%, with the commercial and multifamily sectors declining by 0.2% and 0.5%, respectively.

Overall construction input prices are now 1.2% higher than a year ago, and nonresidential construction input prices are another 1.6% higher. The price of softwood lumber has notably fallen by 14.6% in a 12-month span, joined by a substantial decline in the price of natural gas, which was down some 60.5% in the same time period.

Chart credit: Associated Builders and Contractors

“Construction input prices fell sharply in December,” ABC’s Chief Economist, Anirban Basu, said in a news release. “While plunging oil prices are the primary factor behind the sharp decline, most input prices were tame in 2023’s final month. That serves as a fitting end to a year du...

Nonresidential construction dipped slightly in November, reversing 17 months of growth

2024-01-04T13:55:00-05:00

Spending on nonresidential construction dropped by 0.1% in November in a reversal of a 17-month growth period for the sector, according to an analysis of new U.S. Census Bureau data from the industry group Associated Builders and Contractors (ABC).

The total amount of spending in the sector was $1.143 trillion. Spending on a monthly basis was down in 11 of the 16 nonresidential subcategories. Private nonresidential spending increased by 0.2%, while public nonresidential construction spending fell 0.6% for the month.

“Nonresidential construction spending dipped in November due to a 0.6% decline in public-sector activity,” said ABC’s Chief Economist Anirban Basu. “Despite the monthly setback, 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.”

Table credit: Associated Builders and Contractors

Although the numbers indicate a mild downturn,...

AIA Chief Economist Kermit Baker looks into the financial headwinds and construction activity for the remainder of 2023

2023-07-27T19:27:00-04:00

The report that we just released is showing spending for the year up 20%. So, we’ve obviously seen a much stronger first half of the year than was anticipated. And that’s reflected in the current projection for 2023 as a whole. Since we’ve seen such a strong first half, the consensus is not for more acceleration in the second half. The consensus seems to be that strength is behind us and we’ll begin to moderate as we move into the second half of the year.

Baker predicts institutional construction will remain strong for the rest of this year, bolstered mainly by healthcare. Other sectors he expects to see a rebound include hospitality, K-12, and warehouses, albeit at a dampened pace for the third. He also mentions the new AIA Consensus Construction Forecast predicting a slight (1.7%) contraction in spending for 2024, along with another slight acceleration in institutional, and says both are likely to be exacerbated by the combined effects of inflation and other cost-related factors.

Explore related AEC economic news reported in June and July on Archinect below:

Retrofits could add $42 billion to the UK’s economy, report shows

2023-03-06T14:34:00-05:00

Retrofitting the UK’s historical buildings, from Georgian townhouses to the mills and factories that kickstarted the Industrial Revolution, could generate £35bn of economic output a year, create jobs and play a crucial role in achieving climate targets, research has found. The organisations behind the report are calling on the government to work with industry to [...] advice into a national retrofit strategy, as the UK only has half the skilled workers needed to retrofit all old buildings.

The report from a consortium that includes the National Trust, Historic England, and property group Grosvenor also outlined Britain’s need for 105,000 additional skilled workers to help meet the country’s lagging 2050 net zero decarbonization goals. By that time, the retrofitting market is anticipated to have a value of between £3.5 and £6.5 billion per year (equal to $4.2 and $7.8 billion in USD).

The UK has an underused levy for work programs to help meet the goals. Currently, there are an estimated 6.2 million homes in the country which are considered historic, with another one-third of all commercial buildings carrying the same designation.

Architecture Billings Index is up for the month of October following rough summer

2019-11-22T12:52:00-05:00

According to a recently published report from the American Institute of Architects (AIA), the Architecture Billings Index (ABI) is showing signs of a rebound after showing consistently mixed results over recent months.

The ABI score for the month of October has risen to 52.0, up from 49.7 in September and 47.2 in August. According to how the index is tabulated, any score above 50.0 indicates an increase in the demand for design services.

October ABI highlights

Project inquiries index: 57.9
Design contracts index: 52.9
Regional averages: South (55.5); West (51.3); Midwest (49.9); Northeast (47.2)
Sector index breakdown: mixed practice (55.2); multi-family residential (54.0); institutional (49.9); commercial/industrial (49.3)

The modest rebound brings the majority of the ABI's catego...