Construction Forecasts

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Nonresidential Building Construction Spending Increased 1.6% in March

05/10/2011 by Jim Haughey, RCD Chief Economist

Nonresidential construction spending increased 1.6% in March, including a 5.2% rise in manufacturing. Factory capacity utilization has risen to nearly 76% and absolute factory capacity began expanding in January after a long decline. Hotels (+6.1%) and office (+1.7%) had the first gains in several years. Retail (-0.6%) was 3.3% above the apparent cyclical low in December. Spending on institutional buildings rose 1.2% in March. This appears to be rebound from the weak winter and not the beginning of a sustained recovery.

Nonresidential building construction spending declined 23.4% in 2010 and may decline a little more this spring before beginning to expand. Spending will drop 7.8% in 2011 and then rise 11.8% in 2012.

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

  Monthly Figures*
(latest actual values)
Annual Figures
  Actual Forecast
  Feb-11 Mar-11 2007 2008 2009 2010 2011 2012
Lodging (% change is period versus
same period, previous year)
7.952 8.437 28.683 35.803 25.458 11.467 8.287 9.171
-40.1% -31.1% 59.5% 24.8% -28.9% -55.0% -27.7% 10.7%
Office 33.508 34.061 65.198 68.403 52.868 37.514 35.019 40.588
  -18.7% -13.7% 20.4% 4.9% -22.7% -29.0% -6.7% 15.9%
Commercial (mainly retail) 39.284 39.062 89.298 86.395 55.421 40.935 40.415 46.213
  -9.0% -6.5% 16.5% -3.3% -35.9% -26.1% -1.3% 14.3%
Health Care 38.528 39.448 43.725 46.830 45.151 40.081 39.558 43.263
  0.1% -3.2% 13.6% 7.1% -3.6% -11.2% -1.3% 9.4%
Education 80.066 80.764 96.514 104.682 102.874 87.839 81.460 88.800
  -12.0% -9.2% 13.4% 8.5% -1.7% -14.6% -7.3% 9.0%
Religious 4.468 4.544 7.541 7.230 6.227 5.322 4.651 5.033
  -20.7% -19.8% -2.6% -4.1% -13.9% -14.5% -12.6% 8.2%
Public Safety 10.719 10.795 10.172 13.086 14.087 11.885 10.893 11.463
  -16.9% -18.0% 30.4% 28.6% 7.7% -15.6% -8.3% 5.2%
Amusement/Recreation 15.544 15.514 21.169 21.855 18.885 16.940 15.693 17.433
  -0.7% -3.4% 11.5% 3.2% -13.6% -10.3% -7.4% 11.1%
Manufacturing 31.141 32.767 40.503 53.099 58.702 38.949 32.139 37.7
  -27.9% -28.0% 25.3% 31.1% 10.6% -33.6% -17.5% 17.3%
Total 261.210 265.392 402.803 437.383 379.673 290.931 268.114 299.661
  -14.2% -12.6% 18.73% 8.58% -13.19% -23.37% -7.84% 11.77%

*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.


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