US Nonresidential Construction Spending Contracts 0.4% in October

Associated Builders & Contractors (ABC), a US-based national construction industry trade association representing more than 23,000 members, reported on Monday that its analysis of the US Census Bureau’s October construction spending data revealed that US nonresidential construction spending declined 0.4% in October.

On a seasonally adjusted annualized basis, nonresidential spending totaled $1.228 trillion.

Spending was down on a monthly basis in 11 of the 16 nonresidential subcategories. Private nonresidential spending decreased 0.3%, while public nonresidential construction spending was down 0.5%.

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

“Total construction spending rose sharply in October, but that was entirely due to a sharp increase in residential activity. Nonresidential construction spending contracted for the month, and the declines were widespread, with spending down in 11 of the 16 subsectors. The 3.9% increase in nonresidential spending over the past 12 months is the smallest since December 2021.

Some of October’s nonresidential weakness and residential strength can be attributed to hurricanes Helene and Milton. The storms stalled work on several projects in North Carolina and Florida and initiated a massive increase in residential repair work. Construction of new housing units is actually down slightly over the past year, while spending on renovations and repairs is up by a robust 18.5%.

The effects of these storms on construction spending dynamics should largely dissipate by the end of the year. Given that a majority of contractors expect their sales to increase over the next six months, according to ABC’s Construction Confidence Index, there’s reason to expect nonresidential construction spending to rebound in the coming months.”