Nonresidential Construction Spending Increases in America

Nonresidential Construction Spending Increases in America

Commercial News » New York City Edition | By WPJ Staff | October 3, 2023 9:26 AM ET

Trend driven by manufacturing and public works projects

According to an Associated Builders and Contractors analysis of data by the U.S. Census Bureau, national nonresidential construction spending increased 0.4% in August 2023. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.09 trillion.

Spending was up on a monthly basis in 12 of the 16 nonresidential subcategories. Private nonresidential spending increased by 0.3%, while public nonresidential construction spending was up 0.6% in August.

"Aggregate nonresidential construction spending expanded at a respectable rate in August," said ABC Chief Economist Anirban Basu. "But manufacturing-related and public sector projects accounted for more than 100% of the monthly increase. Privately financed commercial- and educational-related construction spending declined by almost 1% at least partially due to elevated borrowing costs.

"Despite high interest rates and ongoing weakness in certain segments like office and retail, contractors remain relatively upbeat," said Basu. "Despite still-high materials costs and ongoing labor shortages, a plurality of contractors expect their profit margins to increase over the next six months, according to ABC's Construction Confidence Index."

Associated Builders and Contractors construction data for 2023-Spending_Graph_10.2.23.jpg

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