National Nonresidential Construction Declines 1.1% in March

According to Associated Builders and Contractors (ABC) analysis of data published by the U.S. Census Bureau, national nonresidential construction decreased 1.1% in March. On a seasonally adjusted annualized basis, nonresidential spending totaled $778.5 billion in March. On a monthly basis, spending was down in 11 of 16 nonresidential subcategories. While private nonresidential spending was down -0.9%, public nonresidential construction spending fell 1.5% in March. In a statement prepared for the release of the nonresidential analysis, ABC Chief Economist Anirban Basu said, “While the longer-term outlook for nonresidential construction is superb, the pandemic is lingering, creating much damage to commercial real estate fundamentals. The lodging, office and commercial segments experienced declines in spending in March. Office vacancy rates are elevated in many markets, and the industry experienced negative net absorption. The trials and tribulations of hotel operators, retailers and restauranteurs are also well known. Private nonresidential construction spending is down more than -9% from March 2020.” Basu concludes the statement saying, “The most recent readings suggest that the construction spending recovery will be slow over the near-term. However, as the broader economic recovery picks up additional speed later this year with more pervasive vaccinations and re-openings, both private and public construction spending should begin to manifest more positive momentum later this year and into 2022.”