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Nonresidential Building Construction Ekes Out a Small Gain in November

0 2027 Market Intelligence

Nonresidential building construction spending rose a modest 0.1% in November, essentially unchanged from October when spending dropped 3.1%. Year to date, the measure was down 5.0% from the same period a year earlier. “For lease” private projects spending slipped 0.3% following a 2.3% fall in October. Hotel and office construction posted modest gains of 0.3% and 0.2%, respectively, following significant declines of 5.9% and 2.0% in October.

Nonresidential building construction spending rose a modest 0.1% in November, essentially unchanged from October when spending dropped 3.1%. Year to date, the measure was down 5.0% from the same period a year earlier. “For lease” private projects spending slipped 0.3% following a 2.3% fall in October. Hotel and office construction posted modest gains of 0.3% and 0.2%, respectively, following significant declines of 5.9% and 2.0% in October. Construction spending for institutional projects rose 0.5% after decreasing 2.7% in October. Manufacturing construction spending declined 0.8% in November after plummeting 6.2% the previous month.

Concerns over Europe and oil prices are acting as a drag on nonresidential construction spending. However, with the economy continuing to improve, spending totals will strengthen throughout 2012 and 2013. Low long-term interest rates remain a positive for those contemplating going forward with a project. The stronger foreign exchange value of the dollar is helping to contain input costs but is making it harder for exporters and increasing domestic competition from imports.

The forecast is for nonresidential construction spending to improve in 2012, rising 4.7%, and to accelerate in 2013, advancing 8.1%.

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

  Monthly Figures*
(latest actual values)
3-Month
Moving Average
Actual Forecast
  Sep-11 Oct-11 Nov-11 Sep-11 Oct-11 Nov-11 2008 2009 2010 2011 2012 2013
Lodging 8.659 8.150 8.178 8.527 8.448 8.329 35.806 25.499 11.329 8.464 8.788 9.656
  Month-over-Month % Change 1.5% -5.9% 0.3% -0.5% -0.9% -1.4%            
  Year-over-year % Change (NSA) -17.7% -18.7% -19.0%       24.7% -28.8% -55.6% -25.3% 3.8% 9.9%
Office 34.967 34.274 34.339 34.456 34.490 34.527 68.563 51.908 37.573 34.338 36.342 40.095
  2.2% -2.0% 0.2% -0.5% 0.1% 0.1%            
  -6.3% -5.5% -3.0%       5.1% -24.3% -27.6% -8.6% 5.8% 10.3%
Commercial (mainly retail) 44.939 44.136 43.797 45.657 45.025 44.291 86.212 54.069 40.522 43.356 45.404 48.976
  -2.3% -1.8% -0.8% -0.4% -1.4% -1.6%            
  12.3% 12.4% 11.7%       -3.9% -37.3% -25.1% 7.0% 4.7% 7.9%
Health Care 41.051 38.436 39.159 41.093 40.027 39.549 46.902 44.845 39.879 39.815 41.655 45.349
  1.1% -6.4% 1.9% -0.4% -2.6% -1.2%            
  -0.7% -4.8% -4.5%       7.2% -4.4% -11.1% -0.2% 4.6% 8.9%
Education 87.016 85.699 86.258 85.772 86.216 86.324 104.890 103.202 88.227 84.486 87.046 91.791
  1.3% -1.5% 0.7% 0.7% 0.5% 0.1%            
  -3.9% 1.8% 3.1%       8.4% -1.6% -14.5% -4.2% 3.0% 5.5%
Religious 4.143 4.056 3.883 4.128 4.145 4.027 7.225 6.192 5.208 4.182 4.172 4.472
  -2.2% -2.1% -4.3% 2.6% 0.4% -2.8%            
  -19.3% -17.9% -22.1%       -4.2% -14.3% -15.9% -19.7% -0.2% 7.2%
Public Safety 9.828 9.705 9.901 9.891 9.924 9.811 13.083 13.787 11.118 9.870 9.955 10.151
  -4.0% -1.3% 2.0% -1.5% 0.3% -1.1%            
  -7.9% -5.9% -2.3%       28.3% 5.4% -19.4% -11.2% 0.9% 2.0%
Amusement/Recreation 16.142 15.990 15.430 15.723 15.902 15.854 21.829 19.404 16.959 15.570 16.257 17.382
    -0.9% -3.5% 1.7% 1.1% -0.3%            
  -10.6% -5.7% -10.4%       2.9% -11.1% -12.6% -8.2% 4.4% 6.9%
Manufacturing 40.565 38.058 37.772 38.958 39.621 38.798 53.234 56.836 38.106 35.725 39.130 44.338
  0.8% -6.2% -0.8% 1.9% 1.7% -2.1%            
  14.5% 11.3% 15.9%       31.0% 6.8% -33.0% -6.2% 9.5% 13.3%
Total** 287.310 278.504 278.717 284.205 283.797 281.510 437.744 375.742 288.921 275.805 288.748 312.209
  0.6% -3.1% 0.1% 0.4% -0.1% -0.8%            
  -0.6% 0.8% 1.6%       8.4% -14.2% -23.1% -4.5% 4.7% 8.1%

* Monthly figures are seasonally adjusted at annual rates (SAAR figures).
** Total may not equal the sum of its components due to rounding.
Source: Census Bureau, U.S. Department of Commerce. Forecast: Reed Construction Data.

by Bernie Markstein last update:Jan 30, 2012

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