Nonresidential Construction Spending Declines 0.1% in November

Nonresidential construction spending declined 0.1% in November, according to a review of the US Census Bureau’s November construction spending data by Associated Builders and Contractors (ABC), a national trade association representing over 23,000 members.

On a seasonally adjusted annual basis, spending reached $1.234 trillion. Year-over-year, spending increased by 2.8%, remaining roughly flat when adjusted for inflation.

Spending was down on a monthly basis in 8 of the 16 subcategories. Private spending was unchanged, while public construction spending was down 0.2%.

Commenting on the report, ABC Chief Economist Anirban Basu said:

“Contractor confidence surged post-election. Many contractors expect a combination of deregulation and tax cuts to support greater activity and profitability going forward, including substantial investment in traditional energy sectors and manufacturing. Still, there are reasons for concern.

Nonresidential construction spending momentum has all but disappeared, despite an ongoing boom in data center construction (up 43% year-over-year), largely because project financing costs remain elevated. With inflation remaining stubbornly high and potentially accelerating going forward, interest rates stand to stay higher for longer. Prospective tariff increases threaten to push construction materials prices higher, and shifting immigration policies could expand future worker shortages. Only time will tell whether the recent upswing in optimism will prove justified.”