Nonresidential construction spending fell 0.7% from April to May and is down 7.1% compared with May 2020, according to www.abc.org.
For public construction, spending decreased 0.3% for the month and 8.9% year-to-date. Private nonresidential spending fell 1.1% from April to May and is down 5.8% year-to-date.
“Certain segments have experienced particularly large declines in activity,” said Associated Builders and Contractors Chief Economist Anirban Basu. “Lodging-related construction declined nearly 3% in May and is down more than 23% on a year-ago basis. Despite the red-hot data center construction segment, spending in the office category is down nearly 9% on a year-over-year basis. Spending declines are even larger in the conservation/development, educational and religious categories. Spending in the public safety category, which surged during the earlier months of the pandemic, is down nearly 40% since May 2020.
“Interestingly, while a number of private construction segments are struggling under the dislocating impacts of the pandemic, public nonresidential construction has actually declined more rapidly than the private sector over the past year,” said Basu. “With many state and local governments experiencing much better financial conditions than anticipated a year ago, public construction spending can be expected to improve going forward. However, anticipated improvement may be delayed by the specter of still high construction materials prices, which may induce many project owners to postpone the onset of construction. Construction worker shortages are also deeply problematic, further exacerbating costs at a time of sluggish industry recovery. To put this into further perspective, at the onset of the crisis, residential construction comprised 41% of total construction spending. That proportion is now up to 49%.”
