Today’s Census Bureau release regarding nonresidential construction spending did not just offer good news about April; it also supplied upwardly revised spending data for both February and March. Nonresidential spending expanded 3.2 percent on a monthly basis in April and spending totaled $646.7 billion on a seasonally adjusted, annualized basis, according to the government’s initial estimate. Nonresidential construction is up by a solid 8.8 percent over the past year, consistent with ABC’s forecast of high single-digit growth. The Census Bureau also revised March’s nonresidential spending figure from $611.8 billion to $626.7 billion, and February’s figure from $613.1 billion to $618.4 billion. Initial estimates suggested that nonresidential construction was sagging during the early months of the year; however, the new data indicate spending has expanded during each of the previous three months.
“The upbeat assessment of nonresidential construction in April has been rendered more meaningful by the upward revisions for prior months,” said ABC Chief Economist Anirban Basu. “The presumption had been that nonresidential spending construction data would improve as we approached the summer, and the outlook ahead remains solid. There is a considerable amount of financial capital available to move construction projects forward and low interest rates certainly help. While the availability of substantial financial capital may eventually produce over-built private construction markets, for now the expectation is that progress will continue.”
All but one nonresidential construction sector experienced spending increases in April:
- Manufacturing-related construction spending expanded 2.6 percent in April and is up a whopping 52.9 percent on a yearly basis.
- Office-related construction spending expanded 3.7 percent in April and is up 8.8 percent compared to the same time one year ago.
- Construction spending in the transportation category grew 1.6 percent on a monthly basis and has expanded 11.6 percent on an annual basis.
- Lodging-related construction spending was up 5.5 percent on a monthly basis and 17.6 percent on a year-over-year basis.
- Health care-related construction spending expanded 2.1 percent for the month and is up 2.6 percent compared to the same time last year.
- Spending in the water supply category expanded 0.7 percent from March and is up 0.8 on an annual basis.
- Public safety-related construction spending gained 2.3 percent on a monthly basis, but is down 5.6 percent on a year-over-year basis.
- Commercial construction spending expanded 2.7 percent in April and is up 17.5 percent on a year-over-year basis.
- Religious spending gained 3.3 percent for the month, but is down 7.8 percent compared to the same time last year.
- Sewage and waste disposal-related construction spending gained 0.5 percent for the month and has grown 14.9 percent on a 12-month basis.
- Power-related construction spending grew 2.5 percent for the month, but is 11.3 percent lower than the same time one year ago.
- Highway and street-related construction spending expanded 8.5 percent in April and is up 4.8 percent compared to the same time last year.
- Conservation and development-related construction spending grew 3.7 percent for the month and is up 17.2 percent on a yearly basis.
- Amusement and recreation-related construction spending improved 2.5 percent on a monthly basis and is up 23.3 percent from the same time last year.
- Education-related construction spending gained 3.2 percent for the month and is up 0.4 percent on a year-over-year basis.
Spending declined in only one nonresidential construction subsector in April:
- Communication-related construction spending fell 5.9 percent for the month and is down 5.5 percent for the year.