Nonresidential construction spending decreased 0.4% from July to August and is up 4.7% compared with August 2021, according to www.abc.org.
For public construction, spending decreased 0.8% for the month and is up 3.4% year-to-date. Private nonresidential spending fell 0.1% from July to August and is up 5.5% year-to-date. Spending was down for the month in 10 of the 16 nonresidential subcategories.
“The disparity between high contractor confidence and worrisome macroeconomic outcomes persists,” said Associated Builders and Contractors Chief Economist Anirban Basu. “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.
“But the nonresidential construction data indicate that consistent spending growth remains elusive,” Basu continued. “Given the rising costs of project financing and delivering construction services, that is not surprising. Arguably, it is contractor confidence that is counterintuitive.”
Basu said looking at segment-specific data is key when trying to reconcile high contractor confidence with weak macroeconomic outcomes.
“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,” Basu said. “This is especially apparent in certain public construction segments like water/sewer, highway/street and flood control.”