Nonresidential Construction Spending Decreases in May, First Time in Nearly a Year

Construction worker

National nonresidential construction spending decreased 0.2% in May, according to an Associated Builders and Contractors (ABC) analysis of data published recently by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.06 trillion.

Spending declined on a monthly basis in nine of the 16 nonresidential subcategories. Private nonresidential spending fell 0.3%, while public nonresidential construction spending increased 0.1% in May.

“Nonresidential construction spending declined in May, ending a streak of 11 consecutive monthly increases,” said ABC chief economist Anirban Basu. “While spending is up more than 17% over that span, manufacturing-related construction has accounted for the majority of that increase. Excluding the manufacturing segment, nonresidential construction spending is barely outpacing inflation, up just 6% over the past year.”

“Contractors remain relatively upbeat, according to ABC’s Construction Confidence Index, and ongoing strength in manufacturing and publicly financed segments justifies that confidence,” Basu continued. “Unfortunately, conditions may prove challenging in other segments over the next few quarters. Interest rates remain elevated and are likely to rise at least once more over the second half of 2023, exacerbating already tight credit conditions and ultimately limiting construction activity.”

Visit abc.org/economics for the Construction Backlog Indicator and Construction Confidence Index, plus analysis of spending, employment, job openings and the Producer Price Index.

 

Cleanfax Staff

Cleanfax provides cleaning and restoration professionals with information designed to help them manage and grow their businesses.

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