Nonresidential Construction Spending Down in September, August Data Upwardly Revised

WASHINGTON, D.C. — Nonresidential construction spending fell 0.9 percent from August to September 2016, according to an analysis of U.S. Census Bureau data released by Associated Builders and Contractors. Nonresidential spending totaled $690.5 billion on a seasonally adjusted, annualized basis for the month, 0.7 percent below September 2015’s figure.

The government revised the August nonresidential construction spending estimate from $686.6 billion to $696.6 billion; otherwise September spending would have risen on a month-over-month basis. Eleven of 16 nonresidential construction subsectors experienced monthly declines.

“Since late 2015, the level of nonresidential construction spending in America has been effectively flat,” said ABC Chief Economist Anirban Basu. “Undoubtedly, soft U.S. economic growth has had an impact on nonresidential construction spending growth. For several quarters prior to the third quarter of 2016, U.S. economic growth hovered around 1 percent.

“However, public policy has also played a large part in shaping trends in nonresidential construction,” said Basu. “A number of primarily publicly financed construction segments have experienced declines in spending over the past year, including sewage and waste disposal (-18.8 percent), water supply (-13.7 percent), public safety (-13.0 percent) and transportation (-11.3 percent). Meanwhile, the level of construction spending in office, lodging and commercial segments is up on a year-over-year basis, though spending in the office and commercial categories was down on a month-over-month basis and lodging-related construction was roughly flat.”