American Road & Transportation Builders Association

Nonresidential Construction Spending Slips in March

Nonresidential construction spending inched down in March, making it the third consecutive month in which spending declined. Nonresidential construction spending fell 0.1 percent on a monthly basis in March but has risen 4.4 percent on a yearly basis according to a May 1 release by the U.S. Census Bureau. Spending for the month totaled $568.5 billion on a seasonally adjusted, annualized basis.

“After yesterday’s GDP report, which indicated that both nonresidential and residential fixed investment declined during the first quarter of 2014, today’s downbeat construction spending report is not a surprise,” said Associated Builders and Contractors Chief Economist Anirban Basu. “The factors that have produced recent economic and construction slowdowns appear to be temporary for the most part and not a sign of emerging economic turbulence. Given recent reports of increased private sector hiring, construction activity should pick up meaningfully during the second quarter.”

Seven of 16 nonresidential construction subsectors posted increased spending in March:

  • Highway and street-related construction spending expanded 0.5 percent in March and is up 8.5 percent compared to the same time last year.
  • Lodging construction spending is up 1.2 percent on a monthly basis and is up 29.6 percent on a year-over-year basis.
  • Office-related construction spending grew by 0.2 percent in March and is up 10.9 percent from the same time one year ago.
  • Construction spending in the transportation category gained 4.3 percent on a monthly basis and has expanded by 9.6 percent from the same time last year.
  • Spending in the water supply category grew 8.9 percent on the month but is down 5.3 percent from March of 2013.
  • Manufacturing-related spending gained 0.4 percent on a monthly basis and is up 7.3 percent from this time last year.
  • Religious spending gained 3 percent for the month but is down 19.4 percent from the same time last year.

Spending in nine nonresidential construction subsectors decreased in March:

  • Communication construction spending was down 3 percent for the month but is up 32.5 percent from March 2013.
  • Education-related construction spending fell 1.6 percent for the month and is down 3.8 percent on a year-over-year basis.
  • Commercial construction spending fell 1.5 percent in March but is up 7.4 percent on a year-over-year basis.
  • Public safety-related construction spending fell 2.6 percent on a monthly basis and has declined 10.3 percent on a year-over-year basis.
  • Sewage and waste disposal-related construction spending declined 1.3 percent for the month and has declined 4.4 percent from the same time last year.
  • Amusement and recreation-related construction spending fell 4.1 percent on a monthly basis and is down 0.4 percent from the same time last year.
  • Health care-related construction spending fell 2 percent for the month and is down 5.3 percent since March of 2013.
  • Conservation and development-related construction spending fell 1.6 percent for the month but is up 15.3 percent on a yearly basis.
  • Power construction spending lost 0.1 percent for the month but was 1.2 percent higher than the same time last year.

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