ABC: Nonresidential construction spending dips in August

National nonresidential construction spending was down 0.4 percent in August, according to an Associated Builders & Contractors (ABC) analysis of U.S. Census Bureau data.

On a seasonally adjusted annualized basis, nonresidential spending totaled $859.3 billion for the month.

Spending was down on a monthly basis in 10 of 16 nonresidential subcategories. Private nonresidential spending was down 0.1 percent while public nonresidential construction spending was down 0.8 percent in August.

“The disparity between high contractor confidence and worrisome macroeconomic outcomes persists,” says Anirban Basu, chief economist for ABC National. “According to ABC’s Construction Confidence Index and Backlog Indicator, many contractors remain in expansion mode and expect to experience rising sales and profit margins going forward. Many also expect their employment levels to be higher in six months.”

He adds that consistent spending growth remains elusive amidst rising costs of project financing and delivering construction services.

“Reconciling strong microeconomic perspective with weak macroeconomic outcomes involves looking at segment-specific data,” Basu says. “While some segments like office and lodging continue to struggle in the context of behavioral shifts wrought by the pandemic, other segments are showing significant momentum. This is especially apparent in certain public construction segments like water and sewer, highway and street, and flood control.”