Private nonresidential construction spending increased 0.7 percent in November 2008 compared to October 2008, according to the Jan. 5 report by the U.S. Census Bureau. Over the past year, private nonresidential construction spending has increased 10.3 percent and stood at $428.2 billion in November.  

Overall, total nonresidential construction spending was at $742.1 billion in November 2008, an increase of 1.0 percent from the previous month and a gain of 9.2 percent from a year ago.  

“The figures for nonresidential construction spending continue to surprise economists,” said Anirban Basu, ABC chief economist. “Reflecting the observations of many ABC members, the numbers from November on construction spending remain satisfactory.  

“However, it is the future that is considerably more worrisome,” Basu added. “It should also be noted that September and October construction spending estimates were revised upward, indicating that the nonresidential construction industry’s downturn has been softer than had been estimated earlier.”  

Twelve of the 16 subsectors within the nonresidential construction index produced gains on a year-over-year basis, with manufacturing rising 61.5 percent, public safety up 29.8 percent, and power up 27.1 percent. Ten of those 16 subsectors recorded gains on a monthly basis including public safety, up 9.3 percent, conservation and development, up 9.0 percent, and power, up 5.3 percent.  

However, some subsectors posted decreases in spending on a year-over-year basis including communication, commercial and religious construction. Communication-related construction spending was down on a monthly basis, in addition to religious, commercial, amusement and recreation.  

“All eyes will now turn to the Obama administration’s much-anticipated stimulus package and to future data releases,” Basu noted. “Recent discussions in Washington are leading many to believe that part of the stimulus plan will be related to tax cuts, while desirable by many, would not benefit the construction industry as directly as a package in which the focus was more purely on infrastructure build-out.”  

Public nonresidential construction continued to increase and was up 1.4 percent in November on a monthly basis and gained 7.8 percent on a year-over-year basis. On the other side, residential construction continued to decrease in November 2008 compared to October 2008 and declined 22.8 percent since November 2007. Total construction was down 0.6 percent from last month and 3.3 percent from the same time last year.  

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