Nonresidential construction spending increased 0.1% from May to June and is up 18% compared with June 2022, according to Associated Builders and Contractors.
For public construction, spending increased 0.3% for the month and is up 13.8% year to date. Private nonresidential spending held steady from May to June and is up 20.9% year to date. Spending was up for the month in 12 of the 16 nonresidential subcategories.
“Nonresidential construction spending growth downshifted over the past two months,” said ABC Chief Economist Anirban Basu. “While stakeholders can expect ongoing spending growth in public nonresidential construction segments as more Infrastructure Investment and Jobs Act monies flow into the economy, private developer-driven activity appears to be drying up in the context of higher costs of capital and tighter credit conditions.
“Among other things, these dynamics will translate into larger spreads in performance among contractors,” Basu continued. “While those that focus on public work stand to remain busy for years to come, those who specialize in meeting the needs of developers of office buildings, hotels and shopping centers are likely to struggle to support backlog going forward. The good news is that there remain private construction segments associated with rosier prospects, including manufacturing, data centers and health care.”
