Nonresidential construction spending increased 0.3% from December 2022 to January and is up 15.9% compared with January 2022, according to www.abc.org.
For public construction, spending decreased 0.6% for the month and is up 11.2% year-to-date. Private nonresidential spending rose 0.9% from December 2022 to January and is up 19.1% year-to-date. Spending was down for the month in seven of the 16 nonresidential subcategories.
“Nonresidential construction spending inched higher to start the year and is just below the all-time high established in November,” said Associated Builders and Contractors Chief Economist Anirban Basu. “On a year-over-year basis, spending in the nonresidential sector continues to outpace inflation. That’s largely attributable to strength in the industrial segment; manufacturing-related construction spending surged 5.9% in January and is up by an astonishing 53.6% since January 2022. With the CHIPS and Science Act directing $280 billion into semiconductor manufacturing and an ongoing desire to reshore manufacturing capacity, the segment should continue to thrive.
“Excluding manufacturing-related construction, nonresidential spending actually declined in January,” Basu continued. “A combination of headwinds, including severely elevated borrowing costs, ongoing labor shortages and still-high input costs are likely to blame. Despite these factors and a gloomy economic outlook, a majority of contractors continue to expect their sales to increase over the next six months, according to ABC’s Construction Confidence Index.”