WASHINGTON, March 1—National nonresidential construction spending increased by 0.3% in January, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $968.7 billion for the month.
Spending was down on a monthly basis in seven of the 16 nonresidential subcategories. Private nonresidential spending was up 0.9%, while public nonresidential construction spending was down 0.6% in January.
“Nonresidential construction spending inched higher to start the year and is just below the all-time high established in November,” said ABC Chief Economist Anirban Basu. “On a year-over-year basis, spending in the nonresidential sector continues to outpace inflation. That’s largely attributable to strength in the industrial segment; manufacturing-related construction spending surged 5.9% in January and is up by an astonishing 53.6% since January 2022. With the CHIPS and Science Act directing $280 billion into semiconductor manufacturing and an ongoing desire to reshore manufacturing capacity, the segment should continue to thrive.
“Excluding manufacturing-related construction, nonresidential spending actually declined in January,” said Basu. “A combination of headwinds, including severely elevated borrowing costs, ongoing labor shortages and still-high input costs are likely to blame. Despite these factors and a gloomy economic outlook, a majority of contractors continue to expect their sales to increase over the next six months, according to ABC’s Construction Confidence Index.”
Authored by Associated Builders and Contractors and originally published on abc.org