Nonresidential Construction Declines for the Fourth Consecutive Month in October

According to an Associated Builders and Contractors (ABC) analysis of construction spending data published by the US Census Bureau on Thursday (12-1-22), national nonresidential construction declined by 0.3% in October. On a seasonally adjusted annualized basis, nonresidential spending totaled $898.4 billion in October.

Of the 16 nonresidential subcategories, spending was down on a monthly basis in 7 of them. Private nonresidential spending was down 0.8%, while public nonresidential spending was up 0.6% in October.

Adding his analysis to the October report, ABC’s Chief Economist Dr. Anirban Basu said:

“While economists have spent much of 2022 watching interest rates march higher and fretting about recession, contractors have been working through their lofty backlog and improving America’s built environment. Despite the rising cost of capital, elevated materials prices and equipment shortages, contractors have generally remained upbeat despite a worsening outlook, according to ABC’s Construction Confidence Index.

These data suggest that nonresidential construction activity is weakening. Spending declined in a majority of nonresidential subsectors in October, and residential spending has now fallen in each of the previous four months. The only bright spot: the 0.6% increase in publicly financed nonresidential construction spending. The infrastructure package and excess pandemic relief funds should allow the public sector to retain momentum even as the broader economy weakens.”