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Nonresidential Building Construction Spending Increased 0.1% in June

0 1662 Market Intelligence

Nonresidential construction spending rose 0.1% in June and the 0.5% initially reported May decline is now a 0.2% gain. For lease project spending increased 1.2%, mostly for retail while institutional project spending dropped 1.4%. For lease project spending has increased 4.8% since January. Spending on manufacturing projects rose 4.1%, the fifth consecutive monthly gain. Declining institutional and rising commercial spending will continue well into next year.

Nonresidential construction spending rose 0.1% in June and the 0.5% initially reported May decline is now a 0.2% gain. For lease project spending increased 1.2%, mostly for retail while institutional project spending dropped 1.4%. For lease project spending has increased 4.8% since January. Spending on manufacturing projects rose 4.1%, the fifth consecutive monthly gain. Declining institutional and rising commercial spending will continue well into next year. Stimulus funding has ended and tax financed public construction will weaken through the 2013 fiscal year.

Nonresidential building construction spending declined 23.4% in 2010 and has increased 0.9% through June. Only a marginal increase is forecast for this summer resulting in a 7.9% decline for 2011 vs. 2010. Accelerating recovery will push the 2012 gain to 8.9% with a further 13.3% rise projected for 2013.

U.S. Nonresidential Construction
(billions of U.S. current dollars)

  Monthly Figures*
(latest actual values)
Annual Figures
  Actual Forecast
  May-11 Jun-11 2009 2010 2011 2012 2013
Lodging (% change is period versus
same period, previous year)
8.273 8.419 25.458 11.467 8.413 9.113 10.3175
-28.7% -26.1% -28.9% -55.0% -26.6% 8.3% 13.2%
Office 32.908 32.930 52.868 37.514 34.340 40.388 46.375
  -12.0% -11.1% -22.7% -29.0% -8.5% 17.6% 14.8%
Commercial (mainly retail) 42.673 43.476 55.421 40.935 42.030 46.213 53.000
  1.5% 5.5% -35.9% -26.1% 2.7% 10.0% 14.7%
Health Care 38.944 39.879 45.151 40.081 39.631 42.975 48.55
  -1.5% 0.4% -3.6% -11.2% -1.1% 8.4% 13.0%
Education 82.255 79.672 102.874 87.839 81.244 83.625 91.000
  -6.7% -9.1% -1.7% -14.6% -7.5% 2.9% 8.8%
Religious 4.196 3.963 6.227 5.322 4.212 4.299 4.673
  -23.4% -27.8% -13.9% -14.5% -20.9% 2.1% 8.7%
Public Safety 10.085 10.277 14.129 11.885 10.143 11.083 12.2875
  -18.3% -16.8% 8.0% -15.9% -14.7% 9.3% 10.9%
Amusement/Recreation 14.988 14.522 18.885 16.940 15.343 17.225 20.200
  -7.3% -15.4% -13.%6 -10.3% -9.4% 12.3% 17.3%
Manufacturing 33.291 34.651 58.702 38.949 32.728 37 44.250
  -18.4% -11.9% 10.6% -33.6% -16.0% 13.1% 19.6%
Total 267.613 267.789 379.715 290.931 268.084 291.919 330.653
  -8.8% -8.1% -13.2% -23.4% -7.9% 8.9% 13.3%

*Monthly figures are seasonally adjusted at annual rates (SAAR figures).
Actuals: U.S. Census Bureau (Department of Commerce) (put-in-place investment figures).
Forecasts and table: Reed Construction Data.

by Jim Haughey

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