Construction Forecasts

News & Analysis

Nonresidential Building Construction Spending Declined 0.5% in May

07/11/2011 by Jim Haughey, RCD Chief Economist

Nonresidential construction spending fell 0.5% in May but the upward spike in March, as expected, has been more than reversed by delayed starts during the period of weak economic growth in the early spring. Institutional spending fell 1.5% as the stimulus funded came to an end and public budget cutbacks accelerated. Spending for “for lease” buildings rose 0.5% in response to modest rises in rental and occupancy rates. The value of private commercial starts has steadied well above the cyclical low level and design work in progress continues to expand.

Nonresidential building construction spending declined 23.4% in 2010 but has fallen only 1.0% further through May. No more significant declines are expected although the full year 2011 will be down 8.6% from the full year 2010. A 10.4% rise is forecast for 2012.

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

  Monthly Figures*
(latest actual values)
Annual Figures
  Actual Forecast
  Apr-11 May-11 2007 2008 2009 2010 2011 2012
Lodging (% change is period versus
same period, previous year)
8.227 8.461 28.683 35.803 25.458 11.467 8.463 9.189
-29.3% -27.1% 59.5% 24.8% -28.9% -55.0% -26.2% 8.6%
Office 32.761 32.823 65.198 68.403 52.868 37.514 34.318 40.388
  -14.5% -12.2% 20.4% 4.9% -22.7% -29.0% -8.5% 17.7%
Commercial (mainly retail) 40.319 40.417 89.298 86.395 55.421 40.935 40.737 46.213
  -3.8% -3.9% 16.5% -3.3% -35.9% -26.1% -0.5% 13.4%
Health Care 39.196 38.843 43.725 46.830 45.151 40.081 39.632 43.400
  -0.9% -1.7% 13.6% 7.1% -3.6% -11.2% -1.1% 9.5%
Education 83.408 81.233 96.514 104.682 102.874 87.839 81.045 84.450
  -5.0% -7.8% 13.4% 8.5% -1.7% -14.6% -7.7% 4.2%
Religious 4.225 4.065 7.541 7.230 6.227 5.322 4.205 4.320
  -22.8% -25.8% -2.6% -4.1% -13.9% -14.5% -21.0% 2.7%
Public Safety 9.772 9.995 10.172 13.086 14.129 11.885 10.052 11.108
  -22.2% -19.1% 30.4% 28.6% 8.0% -15.9% -15.4% 10.5%
Amusement/Recreation 14.628 14.817 21.169 21.855 18.885 16.940 15.383 17.300
  -13.6% -8.3% 11.5% 3.2% -13.6% -10.3% -9.2% 12.5%
Manufacturing 31.604 32.209 40.503 53.099 58.702 38.949 32.097 37.175
  -29.4% -21.1% 25.3% 31.1% 10.6% -33.6% -17.6% 15.8%
Total 264.140 262.863 402.803 437.383 379.715 290.931 265.932 293.541
  -11.7% -10.4% 18.73% 8.58% -13.18% -23.38% -8.59% 10.38%

*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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