Nonresidential Construction Spending Slightly Higher in June

According to data published on Tuesday (8-1-23) by the US Census Bureau, with additional analysis by Associated Builders and Contractors (ABC), nonresidential construction spending increased 0.1% in June. Year-over-year, ABC says spending is up 18%. On a seasonal adjusted annualized basis, nonresidential spending topped $1.07 trillion in June.

Spending increased on a monthly basis in 12 of the 16 nonresidential categories. Private nonresidential spending was virtually unchanged, while public nonresidential spending increased by 0.3% in June.

Adding additional background and his analysis to the report, ABC Chief Economist Anirban Basu said:

“Nonresidential construction spending growth downshifted over the past two months. While stakeholders can expect ongoing spending growth in public nonresidential construction segments as more Infrastructure Investment and Jobs Act monies flow into the economy, private developer-driven activity appears to be drying up in the context of higher costs of capital and tighter credit conditions.

Among other things, these dynamics will translate into larger spreads in performance among contractors. While those that focus on public work stand to remain busy for years to come, those who specialize in meeting the needs of developers of office buildings, hotels, and shopping centers are likely to struggle to support backlog going forward. The good news is that there remain private construction segments associated with rosier prospects, including manufacturing, data centers, and health care.”