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Nonresidential Construction Spending Slips 0.6 Percent in November


Despite a pent-up demand for construction activity, the nation’s nonresidential construction spending slipped 0.6 percent in November, with outlays decreasing to a seasonally adjusted annual rate of $564.1 billion, according to the Jan. 2 report by the U.S. Census Bureau. Year-over-year, total nonresidential construction spending is up 2.9 percent.

Both private and public nonresidential construction spending was down for the month. Private spending fell 0.7 percent and public spending was down 0.5 percent. Private nonresidential construction was up 8.2 percent from the same time last year, while public nonresidential construction spending was down 2.3 percent over the same period.

Construction sectors posting the largest monthly decreases include conservation and development, down 13.5 percent; religious, down 6 percent; and amusement and recreation, down 5.7 percent. Construction sectors with the largest year-over-year decreases in spending include conservation and development, down 16.3 percent; religious, down 9.9 percent; public safety, down 7.2 percent; highway and street, down 5.8 percent; and amusement and recreation, down 5.6 percent.

Only four nonresidential construction sectors posted increases for the month, including   communication, up 3.3 percent; sewage and waste disposal, up 1.4 percent; transportation, up 1.3 percent; and highway and street, up 0.4 percent. Seven sectors maintained spending above levels from one year ago, including transportation, up 22.7 percent; lodging, up 21.9 percent; power, up 13.4 percent; commercial, up 5.7 percent; manufacturing, up 4.6 percent; communication, up 4.1 percent; and office, up 2.8 percent.

Residential construction spending increased 0.4 percent for the month and is up 18 percent from the same time last year.

Overall, total construction spending–which includes both nonresidential and residential spending–was down 0.3 percent for the month and is up 7.7 percent compared to November 2011.


“The November construction spending report does not offer many surprises,” said Associated Builders and Contractors Chief Economist Anirban Basu. “With fiscal cliff concerns hanging over the heads of decision makers, construction starts activity has been truncated and construction spending momentum has withered.

“Because of the weak monthly performance, fewer than half of the sixteen nonresidential construction segments report year-over-year gains and many of those only recorded gains in the single digits,” Basu said. “In addition, nonresidential construction spending weakness was broad-based, encompassing both private and public spending.  

“With at least some of the fiscal cliff issues now behind us, prospects for renewed construction activity momentum have improved,” said Basu. “While improvement in construction activity will likely require several months to become apparent, broader economic factors suggest that pent-up demand for construction has been building.

“ABC’s 2013 construction forecast has remained consistent with the notion that America would not fall off her fiscal cliff and construction momentum would be renewed by the latter part of next year,” Basu said. “What has transpired in the last few days indicates that this forecast remains likely to come true.”

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