Nonresidential construction spending decreased 0.5% from November 2022 to December 2022 and is up 13.8% compared with December 2021, according to www.abc.org.
For public construction, spending decreased 0.4% for the month and is up 12.1% year-to-date. Private nonresidential spending fell 0.5% from November 2022 to December 2022 and is up 15% year-to-date. Spending was down for the month in 10 of the 16 nonresidential subcategories.
“Nonresidential construction spending fell in December, ending a streak of six straight monthly increases,” said Associated Builders and Contractors Chief Economist Anirban Basu. “Despite the decline, nonresidential spending is up 13.8% year over year, an increase outpacing both overall inflation (6.4%) and materials prices inflation (+7.6%). More than half of the increase in nonresidential construction over the past year is due to heightened activity in two segments: manufacturing, as megaprojects begin across the nation, and commercial, a category that includes warehouse- and distribution-related construction.
“While contractors remain reasonably confident, according to ABC’s Construction Confidence Index, there is reason for caution,” Basu continued. “Worker shortages remain a challenge for contractors, and elevated interest rates have increased borrowing costs, making certain projects unfeasible at the margins while also driving the economy toward a potential recession this year.”